ReportWire

Tag: Alphabet Class C

  • Google to cut down on employee laptops, services and staplers for ‘multi-year’ savings

    Google to cut down on employee laptops, services and staplers for ‘multi-year’ savings

    Ruth Porat, Alphabet CFO

    Adam Galica | CNBC

    Google’s finance chief Ruth Porat recently said in a rare companywide email that the company is making cuts to employee services.

    “These are big, multi-year efforts,” Porat said in a Friday email titled: “Our company-wide OKR on durable savings.” Elements of the email were previously reported by The Wall Street Journal.

    In separate documents viewed by CNBC, Google said it’s cutting back on fitness classes, staplers, tape and the frequency of laptop replacements for employees.

    One of the company’s important objectives for 2023 is to “deliver durable savings through improved velocity and efficiency.” Porat said in the email. “All PAs and Functions are working toward this,” she said, referring to product areas. OKR stands for objectives and key results.

    The latest cost-cutting measures come as Alphabet-owned Google continues its most severe era of cost cuts in its almost two decades as a public company. The company said in January that it was eliminating 12,000 jobs, representing about 6% of its workforce, to reckon with slowing sales growth following record head count growth.

    Cuts have shown up in other ways. The company declined to pay the remainder of laid-off employees’ maternity and medical leaves, CNBC previously reported.

    In her recent email, Porat said the layoffs were “the hardest decisions we’ve had to make as a company.”

    “This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward — particularly in AI,” Porat’s email said.

    Porat referred to the year 2008 twice in her email.

    “We’ve been here before,” the email stated. “Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E budgets, cafes, micro kitchens and mobile phone usage, and removed the hybrid vehicle subsidiary.”

    “Just as we did in 2008, we’ll be looking at data to identify other areas of spending that aren’t as effective as they should be, or that don’t scale at our size.”

    In a statement to CNBC, a spokesperson said, “As we’ve publicly stated, we have a company goal to make durable savings through improved velocity and efficiency. As part of this, we’re making some practical changes to help us remain responsible stewards of our resources while continuing to offer industry-leading perks, benefits and amenities.”

    Cutting down on desktop PCs and staplers

    Among the equipment changes, Google is pausing refreshes for laptops, desktop PCs and monitors. It’s also “changing how often equipment is replaced,” according to internal documents viewed by CNBC.

    Google employees who are not in engineering roles but require a new laptop will receive a Chromebook by default. Chromebooks are laptops made by Google and use a Google-based operating system called Chrome OS.

    It’s a shift from the range of offerings, such as Apple MacBooks, that were previously available to employees. “It also provides the best opportunity across all of our managed devices to prevent external compromise,” one document about the laptop changes said.

    An employee can no longer expense mobile phones if one is available internally, the document also stated. And employees will need director “or above” approval if they need an accessory that costs more than $1,000 and isn’t available internally.

    Under a section titled “Desktops and Workstations,” the company said CloudTop, the company’s internal virtual workstation, will be “the default desktop” for Googlers.

    In February, CNBC reported the company asked its cloud employees and partners to share desks by alternating days and are expected to transition to relying on CloudTop for their workstations.

    Google employees have also noticed some more extreme cutbacks to office supplies in recent weeks. Staplers and tape are no longer being provided to print stations companywide as “part of a cost effectiveness initiative,” according to a separate, internal facilities directive viewed by CNBC.

    “We have been asked to pull all tape/dispensers throughout the building,” a San Francisco facility directive stated. “If you need a stapler or tape, the receptionist desk has them to borrow.”

    A Google spokesperson said the internal message about staplers and tape was misinformed. “Staplers and tape continue to be provided to print stations. Any internal messages that claim otherwise are misinformed.”

    ‘We’ve baked too many muffins on a Monday’

    Google’s also cutting some availability of employee services.

    “We set a high bar for industry-leading perks, benefits and office amenities, and we will continue that into the future,” Porat’s email stated. “However, some programs need to evolve for how Google works today.”

    “These are mostly minor adjustments,” stated a separate internal document from the company’s real estate and workplace team. The document said food, fitness, massage and transportation programs were designed for when Googlers were coming in five days a week.

    “Now that most of us are in 3 days a week, we’ve noticed our supply/demand ratios are a bit out of sync: We’ve baked too many muffins on a Monday, seen GBuses run with just one passenger, and offered yoga classes on a Friday afternoon when folks are more likely to be working from home,” the document stated.

    As a result, Google may close cafes on Mondays and Fridays and shut down some facilities that are “underutilized” due to hybrid schedules, the document states.

    As a part of the January U.S. layoffs, the company let go of more than two dozen on-site massage therapists.

    Read the full email from Ruth Porat here:

    This year, one of our important company OKRs is to deliver durable savings through improved velocity and efficiency. All PAs and Functions are working towards this: Googlers have asked for more detail so we’re sharing more information below. This work is particularly vital because of our recent growth, the challenging economic environment, and our incredible investment opportunities to drive technology forward—particularly in AI.

    We’ve been here before. Back in 2008, our expenses were growing faster than our revenue. We improved machine utilization, narrowed our real estate investments, tightened our belt on T&E budgets, cafes, Microkitchens and mobile phone usage, and removed the hybrid vehicle subsidy. Since then, we’ve continued to rebalance based on data about how programs and services are being used.

    How we’re approaching this

    The hardest decisions we’ve had to make as a company to reduce our workforce, and that is still being worked through in some countries. Most of the other large changes and savings won’t be visible to most Googlers but will make aa noticeable difference to our costs — think innovation in machine utilization for AI computing and reduced fragmentation of our tech stack. These are big-multi-year efforts. A few examples:

    • We are focused on distributing our compute workloads even more efficiently, getting more out of our servers and data centers. We’ve already made progress with these efforts and will continue to drive efficiencies – this work adds up given infrastructure is one of our largest areas of investment.
    • As we apply our efficient and well-tuned infrastructure and software to ML, we’re continuing to discover more scalable and efficient ways to train and serve models.
    • Improving external procurement is another area where data suggests significant savings – on everything from software to equipment to professional services. As one part of this, we’re piloting an improved buying hub that helps teams find suppliers that we’ve negotiated great rates with.
    • There are other areas we’ve spoken about that will make a big difference: we’re continuing to redeploy teams to higher priority work, to maintain a slower pace of hiring, to be responsible about our T&E spending, and to implement numerous suggestions from the Simplicity Sprint improve our execution and increase our velocity – particularly on prioritization, training, launch and business processes, internal tools and meeting spaces.

    Changes to programs and services

    We want to be upfront that there are also areas where we’ll realize savings that will impact some service Googlers use at work and beyond.

    We set a high bar for industry-leading perks, benefits and office amenities, and will continue that into the future. However, some programs need to evolve for how Google works today. As well as helping to bring down costs, these changes will reduce food waste and be better for the environment.

    • We’re adjusting our office services to the new hybrid workweek. Cafes, Microkitchens and other facilities will be tailored to better match how and when they are being used. Decisions will be based on data. For example, where a cafe is seeing a significantly lower volume of use on certain days, we’ll close it on those days and put more focus instead on popular options that are close by. Similarly, we’ll consolidate microkitchens in buildings where we’re seeing more waste than value. We’ll also shift some fitness classes and shuttle schedules based on how they’re being used.
    • We’ve also assessed the equipment we provide Googlers. Today’s devices have a much longer lifespan and greater performance and reliability, so we have made changes to what’s available and how often it’s replaced—while making sure that people have what they need to perform their role. Because equipment is a significant expense for a company of our size, we’ll be able to save meaningfully here.

    Just as we did in 2008, we’ll be looking at data to identify other areas of spending that aren’t asa they should be, or the don’t scale at our size. We will let Googlers know of any other changes that directly impact services they use.Our opportunities as a company are enormous. We have clear OKRs and substantial resources at our disposal to pursue them, but these resources are finite. Focusing on using them effectively makes a huge difference.

    Source link

  • The digital media rollup dream is dead for the moment — now it’s all about core brand strength

    The digital media rollup dream is dead for the moment — now it’s all about core brand strength

    BuzzFeed CEO Jonah Peretti stands in front of the Nasdaq market site in Times Square as the company goes public through a merger with a special-purpose acquisition company on December 06, 2021 in New York City.

    Spencer Platt | Getty Images

    When a marriage or an engagement fails, it’s common for the participants to take time to work on themselves.

    That’s where the digital media industry finds itself today.

    After years of focusing on consolidating to better compete with Google and Facebook for digital advertising dollars, many of the most well-known digital media companies have abandoned consolidation efforts to concentrate on differentiation.

    “What you’re finding is companies are trying to find a non-substitutable core,” said Jonathan Miller, the CEO of Integrated Media, which specializes in digital media investments. “The era of trying to put these companies together is over, and I don’t think it’s coming back.”

    A 90% decline in BuzzFeed shares since the company went public in 2021, a failed sales process from Vice, the collapse of special purpose acquisition companies, and a choppy advertising market have made digital media executives rethink their companies’ futures. For the moment, executives have decided that more concentrated investment is better than attempts to gain scale.

    “Right now, everyone’s trying to get through a tougher market by focusing on their strengths,” BuzzFeed CEO Jonah Peretti said in an interview with CNBC. “We’re in this period now where we should just focus on innovating for the future and building more efficient, stronger, better companies.”

    What’s happening in the digital media space echoes trends from the biggest media companies, including Netflix, Disney and Warner Bros. Discovery. After losing nearly half their market values, or more, in 2022, those companies have emphasized what makes them different, whether it be distribution, brand or quality of programming, after years of global expansion and mega-mergers. Disney CEO Bob Iger said the word “brand” more than 25 times at a Morgan Stanley media conference this month.

    “I think brands matter,” Iger said. “The more choice people have, the more important brands become because of what they convey to consumers.”

    Making strategic decisions based on consumer demand rather than investor pressure is a pivot for the industry, said Bryan Goldberg, CEO of Bustle Digital Group, which has acquired and developed a number of brands and sites aimed at women, including Nylon, Scary Mommy, Romper and Elite Daily.

    “Too many of the mergers were driven by investor needs as opposed to consumer needs,” Goldberg said in an interview.

    The rollup dream’s rise and fall

    From late 2018 to early 2022, the digital media industry had a shared goal. Pushed by venture capitalist and private equity investors who had made sizeable investments in the industry during the 2010s, companies such as BuzzFeed, Vice, Vox Media, Group Nine, and Bustle Digital Group, or BDG, were talking to each other, in various combinations, about merging to gain scale.

    “If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” Peretti told The New York Times in November 2018, kicking off a multiyear effort to consolidate.

    The rationale was twofold. First, digital media companies needed more scale to compete with Facebook and Google for digital advertising dollars. Adding sites and brands under one corporate umbrella would boost overall eyeballs for advertisers. Cost-cutting from M&A synergies was an added benefit for investors.

    Second, longtime shareholders wanted to exit their investments. Large legacy media companies such as Disney and Comcast‘s NBCUniversal invested hundreds of millions in digital media in the early and mid-2010s. Disney invested more than $400 million in Vice. NBCUniversal put a similar amount into BuzzFeed. By the end of the decade, after seeing the value of those investments fall, legacy media companies made it clear to digital media executives that they weren’t interested in being acquirers.

    Vice Media offices display the Vice logo in Venice, California.

    Mario Tama | Getty Images

    With no strategic buyer available, merging with each other using publicly traded stock could give VC and PE shareholders a chance to cash out of investments that were well past the standard hold time of seven years. Digital media companies eyed special purpose acquisition companies — also known as SPACs or blank-check companies — as a way to go public quickly. The popularity of SPACs picked up steam in 2020 and peaked in 2021.

    Deal flow accelerated. Vox acquired New York Magazine in September 2019. About a week later, Vice announced it had acquired Refinery29, a digital media company focused on younger women. BuzzFeed bought news aggregator and blog HuffPost in 2020 and then acquired digital publisher Complex Networks in 2021 as part of a SPAC transaction to go public. Vox and Group Nine agreed to a merger later that year.

    BuzzFeed, generally thought by industry executives at the time to have the strongest balance sheet with the best growth narrative, successfully went public via SPAC in December 2021. Shares immediately tanked, falling 24% in their first week of trading. The coming weeks and months were even worse. BuzzFeed opened at $10 per share. The stock currently trades at about $1 — a 90% loss of value.

    BuzzFeed’s underwhelming performance coincided with the implosion of the SPAC market in early 2022 as interest rates rose. Other companies that planned to follow BuzzFeed shut down their efforts to go public completely. Vice tried and failed. Now it’s trying for the second time in two years to find a buyer. BDG and Vox, meanwhile, abandoned considerations to go public. Vox instead sold a 20% stake in itself in February to Penske Media, which owns Rolling Stone and Variety.

    The industry turns inward

    Consolidation was always a flawed strategy because digital media could never become big enough to compete with Facebook and Google, said Integrated Media’s Miller.

    “You have to have sufficient amount of scale to matter, but that’s not a winning formula by itself,” Miller said.

    Vice’s deal for Refinery29 is a prime example of a deal motivated by scale that lacked consumer rationale, said BDG’s Goldberg.

    “The digital media rollup has proven successful only when assets are thoughtfully combined with an eye toward consumers,” Goldberg said. “In what world did Vice and Refinery29 make sense in combination?” 

    Vice is engaged in sale talks with a number of buyers that fall outside the digital media landscape, CNBC previously reported. It’s also considering selling itself in pieces if there’s more interest in parts of the company, such as its TV production assets and its ad agency, Virtue.

    Vice is a cautionary tale of what happens to a digital media company when its brand loses luster, Miller said. Valued at $5.7 billion in 2017, Vice is now considering selling itself for around $500 million, according to people familiar with the matter, who asked not to be named because the sale discussions are private.

    A Vice spokesperson declined to comment.

    “In the old days of media, with TV networks, if you were down, you could revive yourself with a hit,” said Miller. “In the internet age, everything is so easily substitutable. If Vice goes down, the audience just moves on to something else.”

    Companies such as BuzzFeed, Vox and BDG are now trying to find an enduring relevancy amid a myriad of information and entertainment options. BuzzFeed has chosen to lean in to artificial intelligence, touting new AI-generated quizzes and other content that fuses the work of staff writers with AI databases.

    BDG has chosen to primarily target female audiences across lifestyle categories.

    Vox has focused on journalism and information across a number of different verticals. That’s a strategy that hasn’t really changed even as the market has turned against digital media, allowing Vox CEO Jim Bankoff the opportunity to continue to hunt for deals. Just don’t expect the partners to be Vice, BDG or BuzzFeed.

    “We want to be the leading modern media company with the strongest portfolio of brands that serve their audiences on modern platforms — websites, podcasts, streaming services — while building franchises through multiple revenue streams,” Bankoff said. “There’s no doubt M&A is part of our playbook, and we expect it will continue to be in the future.”

    Finding an exit

    While executives may be making strategy decisions with a sharper eye toward the consumer, the problem of finding an exit for investors remains. Differentiation may open up the pool of potential buyers beyond the media industry. BuzzFeed’s emphasis on artificial intelligence could attract interest from technology platforms, for instance.

    It’s also possible that there will be an eventual second wave of peer-to-peer mergers. While Integrated Media’s Miller doesn’t expect a future industry rollup, BuzzFeed’s Peretti hasn’t closed the door on the concept if market conditions improve. As executives invest in fewer ideas and verticals, the end result could be healthier companies that are more attractive merger partners, he said.

    “If everyone invests in what they’re best at, if you put them back together, you’d have that diversified digital media company with real scale,” Peretti said. “That helps drive commerce for all parts of a unified company. I think it’s still possible.”

    Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

    WATCH: Axios’ Sara Fischer on BuzzFeed’s continuing struggles

    Source link

  • Bank turmoil is boosting appetite for specific sector ETFs. Here’s why

    Bank turmoil is boosting appetite for specific sector ETFs. Here’s why

    It appears specific sector ETFs are gaining popularity as a way to cushion bank-turmoil fallout.

    According to VettaFi’s Todd Rosenbluth, the trend applies to ETFs holding only a few large companies in particular industries.

    “[They’re] going to be a complement to a broader S&P 500 strategy,” the firm’s head of research told CNBC’s “ETF Edge” on Monday. “We’re seeing this year that active management and actively managed ETFs in particular have been relatively popular in complement to an existing core strategy.”

    Rosenbluth asserts the narrow focus of big-cap sector ETFs can boost potential gains.

    “[In] the same way that you might do individual stocks of favored names … now you’re getting the benefits of five or six of these companies to augment that,” he added. 

    When asked whether these sector ETFs were attempting to reintroduce FAANG stocks — which refers to the five popular tech companies Meta, formerly Facebook, (META); Amazon (AMZN); Apple (AAPL); Netflix (NFLX); and Alphabet (GOOG) — Rosenbluth explained it’s difficult to build ETFs with exposure to only big-cap stocks because companies might be classified in different sectors.

    “You can’t get that right now easily with an ETF [holding] just those five or six stocks,” he said. “If you really wanted to make a call on just those five or six companies, there’s an ETF that soon is coming.”

    Yet, last week on “ETF Edge,” Astoria Advisors’ John Davi suggested bank upheaval could expose problems lurking in ETFs tied to specific sectors.

    “You need to be mindful of your risk,” said Davi, who runs the AXS Astoria Inflation Sensitive ETF.

    For others, the bank turmoil is creating opportunities.

    ‘Not just a stand-alone opportunity’

    Roundhill Investments, an ETF issuer, is planning to launch three big-cap sector ETFs: Big Tech (BIGT), Big Airlines (BIGA) and Big Defense (BIGD).

    These “BIG ETFs” will join its Big Bank ETF (BIGB), which launched last Tuesday. Its median market cap is $145.5 billion, per the company’s website.

    Dave Mazza, the firm’s chief strategy officer, sees similar opportunities for growth beyond the financials sector.

    “People are bidding up some of the larger names, especially in the banking space, because they may be the beneficiaries over the greater regulation coming there,” he said. “The intention here is that [the BIGB] is not just a stand-alone opportunity, but the idea [of] being a leader and potential sweep down the line.”

    The Roundhill Big Bank ETF is down almost 5% since its launch based on Friday’s close.

    Source link

  • Google execs tell employees in testy all-hands meeting that Bard A.I. isn’t just about search

    Google execs tell employees in testy all-hands meeting that Bard A.I. isn’t just about search

    Sundar Pichai, chief executive officer of Google Inc., speaks during the Google I/O Developers Conference in Mountain View, California, U.S., on Tuesday, May 8, 2018.

    David Paul Morris | Bloomberg | Getty Images

    Google executives are continuing to deal with the fallout from last month’s fumbled announcement of the company’s artificial intelligence engine called Bard, but their efforts to clean up the mess are causing further confusion among the workforce.

    In an all-hands meeting on Thursday, executives answered questions from Dory, the company’s internal forum, with most of the top-rated issues related to the priorities around Bard, according to audio obtained by CNBC. It’s the first companywide meeting since Google employees criticized leadership, most notably CEO Sundar Pichai, for the way it handled the announcement of Bard, Google’s ChatGPT competitor.

    Wall Street has punished Google parent Alphabet for the Bard rollout, pushing the stock lower on concern that the company’s core search engine is at risk of getting displaced as consumers eventually turn to AI-powered responses that allow for more conversational and creative answers. Staffers called Google’s initial public presentation “rushed,” “botched” and “un-Googley.”

    Jack Krawczyk, the product lead for Bard, made his all-hands debut on Thursday, and answered the following question from Dory, which was viewed by CNBC.

    “Bard and ChatGPT are large language models, not knowledge models. They are great at generating human-sounding text, they are not good at ensuring their text is fact-based. Why do we think the big first application should be Search, which at its heart is about finding true information?”

    Krawczyk responded by immediately saying, “I just want to be very clear: Bard is not search.”

    “It’s an experiment that’s a collaborative AI service that we talked about,” Krawczyk said. “The magic that we’re finding in using the product is really around being this creative companion to helping you be the sparkplug for imagination, explore your curiosity, etc.”

    But Krawczyk was quick to follow up by saying, “we can’t stop users from trying to use it like search.”

    He said Google is still catering to people who want to use it for search, indicating that the company has built a new feature for internal use called “Search It.”

    “We’re going to be trying to get better at generating the queries associated there, as well as relaying to users our confidence,” Krawczyk said. He added that users will see a tab that says “view other drafts,” which would point people away from search-like results.

    “But as you want to get into more of the search-oriented journeys, we already have a product for that — it’s called search,” he said.

    The attempt to separate Bard from search appeared to signify a pivot in the initial strategy, based on what employees told CNBC and on internal memes that circulated in recent weeks. In the lead up to the Bard announcement, Google executives repeatedly said the technology it was developing internally would integrate with search.

    Several Google employees, who asked not to be named because they weren’t authorized to speak on the matter, told CNBC that the inconsistent answers from executives has led to greater confusion.

    Elizabeth Reid, vice president of engineering for search, echoed Krawczyk’s comments on Thursday, focusing on the company’s extensive use of large language models (LLMs).

    “As Jack said, Bard is really separate from search,” Reid said. “We do have a pretty long history of bringing LLMs into search,” she said, citing models named Bert and Mum.

    But while the company experiments with LLMs, it wants to “keep the heart of what search is,” Reid said.

    In Google’s announcement last month, it mentioned search several times.

    “We’re working to bring these latest AI advancements into our products, starting with Search,” the company said in a blog post. 

    That same week, at an event in Paris, Google search boss Prabhakar Raghavan unveiled some fresh examples of using Bard within search. And following the announcement, company leaders urged all employees to help by spending a few hours testing Bard and rewriting wrong answers, citing a “great responsibility to get it right.”

    CNBC also previously reported the company was testing various Bard-integrated home search page designs.

    Another top-rated question Thursday asked Pichai for different use cases for Bard, since Google employees were asked to help on search and “to rewrite queries with factual information.”

    “It’s important to acknowledge that it’s experimental,” Pichai said in his response. “It’s super important to acknowledge the limitations of these products as well.” Those limits are something he’s addressed in the past.

    Pichai said that with Bard, “you are exposing the ability for users to converse with LLMs,” which will improve over time. “And obviously we are product engineering on top of it,” he said.

    “Products like this get better the more the people who use them,” Pichai said. “It’s a virtuous cycle.”

    ‘It’s an intense time’

    Following Google’s launch of Bard in February, Alphabet’s stock price dropped almost 9%, suggesting that investors were hoping for more in light of growing competition from Microsoft, which is a large investor in ChatGPT creator OpenAI.

    Employees are well aware of how the introduction was received.

    “The first public demo was demoralizing, sent our stock into a nosedive, and invited massive media coverage,” read an employee comment from Dory that was read aloud. Then came the question, “What really happened?” and the request to “please share your candid thoughts on what went wrong at the Bard launch.”

    Pichai referred the answer Krawczyk, who danced around the subject without giving a direct answer.

    “Questions like this can be fair and we want to reiterate the fact that Bard has not launched,” Krawczyk said. “We acknowledged to the world that this is something that we’re experimenting with — we’re testing it. But there’s a lot of excitement in the industry right now.”

    Krawczyk also referenced an event held at Microsoft’s headquarters that week, in which the company showed off how OpenAI’s technology can power Bing search results and other products.

    “You see the stories of ChatGPT coincides with an event that we’re having that was actually focused on search,” Krawczyk said. “There can be challenges around the external perception but, as you heard today, we continue to focus on Bard’s testing.”

    Krawczyk added that Google is excited to get the technology in “users’ hands to capture their creativity.”

    Pichai chimed in to say, “It’s an intense time.”

    “The purpose of the blog post was once we decided we were going to external trusted testers, things could leak and it was important we positioned it,” Pichai said. “We haven’t launched the product yet. And obviously when we launch, we’ll make clear it’s an experimental product.”

    Pichai said that the company hopes to provide more details after Google IO, the annual developer conference. Google has yet to announce dates for the event.

    Another top-rated employee comment from Dory said, “Launching AI seems like a knee-jerk reaction without a strategy.”

    Pichai began his response by noting that Google spends more money on AI research and development than any other company.

    “I disagree with the premise of this question” he said, letting out a laugh. “We are deeply working on AI for a long time. You are right in the sense that, we have to stay focused on users and make sure we are building things which are impactful.” He said, “user input is going to be an important part of the process so it’s important to get it right.”

    Jeff Dean, head of artificial intelligence at Google LLC, speaks during a Google AI event in San Francisco, California, U.S., on Tuesday, Jan. 28, 2020.

    David Paul Morris | Bloomberg | Getty Images

    Jeff Dean, Google’s AI chief, was called upon by Pichai at the all-hands meeting to answer a question regarding the company’s loss of top talent. Specifically, the question asked why Google lost so many key people who were listed on a paper about prominent architecture used for AI.

    “I think it’s important to realize this is a super-competitive field,” Dean said. “People with these kinds of skills are in high demand.”

    Dean said Google has “two of the best AI research teams in the world” and “people working side by side on pushing forward the state of art in AI.”

    Despite the competition in the market, “we have the ability to get things out in papers here but also work on products that touch on millions of users every day,” Dean said.

    Pichai added that, “Just over the last couple of weeks, we are talking to some people who want to join Google who are literally some of the best ML researchers and engineers on the planet.”

    A Google spokesperson didn’t immediately respond to a request for comment.

    WATCH: Google could have a second-mover advantage with its chatbot tech

    Google could have a second-mover advantage with its chatbot tech, says Big Technology's Alex Kantrowitz

    Source link

  • Meet the $10,000 Nvidia chip powering the race for A.I.

    Meet the $10,000 Nvidia chip powering the race for A.I.

    Nvidia CEO Jensen Huang speaks during a press conference at The MGM during CES 2018 in Las Vegas on January 7, 2018.

    Mandel Ngan | AFP | Getty Images

    Software that can write passages of text or draw pictures that look like a human created them has kicked off a gold rush in the technology industry.

    Companies like Microsoft and Google are fighting to integrate cutting-edge AI into their search engines, as billion-dollar competitors such as OpenAI and Stable Diffusion race ahead and release their software to the public.

    Powering many of these applications is a roughly $10,000 chip that’s become one of the most critical tools in the artificial intelligence industry: The Nvidia A100.

    The A100 has become the “workhorse” for artificial intelligence professionals at the moment, said Nathan Benaich, an investor who publishes a newsletter and report covering the AI industry, including a partial list of supercomputers using A100s. Nvidia takes 95% of the market for graphics processors that can be used for machine learning, according to New Street Research.

    The A100 is ideally suited for the kind of machine learning models that power tools like ChatGPT, Bing AI, or Stable Diffusion. It’s able to perform many simple calculations simultaneously, which is important for training and using neural network models.

    The technology behind the A100 was initially used to render sophisticated 3D graphics in games. It’s often called a graphics processor, or GPU, but these days Nvidia’s A100 is configured and targeted at machine learning tasks and runs in data centers, not inside glowing gaming PCs.

    Big companies or startups working on software like chatbots and image generators require hundreds or thousands of Nvidia’s chips, and either purchase them on their own or secure access to the computers from a cloud provider.

    Hundreds of GPUs are required to train artificial intelligence models, like large language models. The chips need to be powerful enough to crunch terabytes of data quickly to recognize patterns. After that, GPUs like the A100 are also needed for “inference,” or using the model to generate text, make predictions, or identify objects inside photos.

    This means that AI companies need access to a lot of A100s. Some entrepreneurs in the space even see the number of A100s they have access to as a sign of progress.

    “A year ago we had 32 A100s,” Stability AI CEO Emad Mostaque wrote on Twitter in January. “Dream big and stack moar GPUs kids. Brrr.” Stability AI is the company that helped develop Stable Diffusion, an image generator that drew attention last fall, and reportedly has a valuation of over $1 billion.

    Now, Stability AI has access to over 5,400 A100 GPUs, according to one estimate from the State of AI report, which charts and tracks which companies and universities have the largest collection of A100 GPUs — although it doesn’t include cloud providers, which don’t publish their numbers publicly.

    Nvidia’s riding the A.I. train

    Nvidia stands to benefit from the AI hype cycle. During Wednesday’s fiscal fourth-quarter earnings report, although overall sales declined 21%, investors pushed the stock up about 14% on Thursday, mainly because the company’s AI chip business — reported as data centers — rose by 11% to more than $3.6 billion in sales during the quarter, showing continued growth.

    Nvidia shares are up 65% so far in 2023, outpacing the S&P 500 and other semiconductor stocks alike.

    Nvidia CEO Jensen Huang couldn’t stop talking about AI on a call with analysts on Wednesday, suggesting that the recent boom in artificial intelligence is at the center of the company’s strategy.

    “The activity around the AI infrastructure that we built, and the activity around inferencing using Hopper and Ampere to influence large language models has just gone through the roof in the last 60 days,” Huang said. “There’s no question that whatever our views are of this year as we enter the year has been fairly dramatically changed as a result of the last 60, 90 days.”

    Ampere is Nvidia’s code name for the A100 generation of chips. Hopper is the code name for the new generation, including H100, which recently started shipping.

    More computers needed

    Nvidia A100 processor

    Nvidia

    Compared to other kinds of software, like serving a webpage, which uses processing power occasionally in bursts for microseconds, machine learning tasks can take up the whole computer’s processing power, sometimes for hours or days.

    This means companies that find themselves with a hit AI product often need to acquire more GPUs to handle peak periods or improve their models.

    These GPUs aren’t cheap. In addition to a single A100 on a card that can be slotted into an existing server, many data centers use a system that includes eight A100 GPUs working together.

    This system, Nvidia’s DGX A100, has a suggested price of nearly $200,000, although it comes with the chips needed. On Wednesday, Nvidia said it would sell cloud access to DGX systems directly, which will likely reduce the entry cost for tinkerers and researchers.

    It’s easy to see how the cost of A100s can add up.

    For example, an estimate from New Street Research found that the OpenAI-based ChatGPT model inside Bing’s search could require 8 GPUs to deliver a response to a question in less than one second.

    At that rate, Microsoft would need over 20,000 8-GPU servers just to deploy the model in Bing to everyone, suggesting Microsoft’s feature could cost $4 billion in infrastructure spending.

    “If you’re from Microsoft, and you want to scale that, at the scale of Bing, that’s maybe $4 billion. If you want to scale at the scale of Google, which serves 8 or 9 billion queries every day, you actually need to spend $80 billion on DGXs.” said Antoine Chakaivan, a technology analyst at New Street Research. “The numbers we came up with are huge. But they’re simply the reflection of the fact that every single user taking to such a large language model requires a massive supercomputer while they’re using it.”

    The latest version of Stable Diffusion, an image generator, was trained on 256 A100 GPUs, or 32 machines with 8 A100s each, according to information online posted by Stability AI, totaling 200,000 compute hours.

    At the market price, training the model alone cost $600,000, Stability AI CEO Mostaque said on Twitter, suggesting in a tweet exchange the price was unusually inexpensive compared to rivals. That doesn’t count the cost of “inference,” or deploying the model.

    Huang, Nvidia’s CEO, said in an interview with CNBC’s Katie Tarasov that the company’s products are actually inexpensive for the amount of computation that these kinds of models need.

    “We took what otherwise would be a $1 billion data center running CPUs, and we shrunk it down into a data center of $100 million,” Huang said. “Now, $100 million, when you put that in the cloud and shared by 100 companies, is almost nothing.”

    Huang said that Nvidia’s GPUs allow startups to train models for a much lower cost than if they used a traditional computer processor.

    “Now you could build something like a large language model, like a GPT, for something like $10, $20 million,” Huang said. “That’s really, really affordable.”

    New competition

    Nvidia isn’t the only company making GPUs for artificial intelligence uses. AMD and Intel have competing graphics processors, and big cloud companies like Google and Amazon are developing and deploying their own chips specially designed for AI workloads.

    Still, “AI hardware remains strongly consolidated to NVIDIA,” according to the State of AI compute report. As of December, more than 21,000 open-source AI papers said they used Nvidia chips.

    Most researchers included in the State of AI Compute Index used the V100, Nvidia’s chip that came out in 2017, but A100 grew fast in 2022 to be the third-most used Nvidia chip, just behind a $1500-or-less consumer graphics chip originally intended for gaming.

    The A100 also has the distinction of being one of only a few chips to have export controls placed on it because of national defense reasons. Last fall, Nvidia said in an SEC filing that the U.S. government imposed a license requirement barring the export of the A100 and the H100 to China, Hong Kong, and Russia.

    “The USG indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia,” Nvidia said in its filing. Nvidia previously said it adapted some of its chips for the Chinese market to comply with U.S. export restrictions.

    The fiercest competition for the A100 may be its successor. The A100 was first introduced in 2020, an eternity ago in chip cycles. The H100, introduced in 2022, is starting to be produced in volume — in fact, Nvidia recorded more revenue from H100 chips in the quarter ending in January than the A100, it said on Wednesday, although the H100 is more expensive per unit.

    The H100, Nvidia says, is the first one of its data center GPUs to be optimized for transformers, an increasingly important technique that many of the latest and top AI applications use. Nvidia said on Wednesday that it wants to make AI training over 1 million percent faster. That could mean that, eventually, AI companies wouldn’t need so many Nvidia chips.

    Source link

  • YouTube CEO Susan Wojcicki says she’s stepping down

    YouTube CEO Susan Wojcicki says she’s stepping down

    YouTube CEO Susan Wojcicki speaks during the opening keynote address at the Google I/O 2017 Conference at Shoreline Amphitheater on May 17, 2017 in Mountain View, California.

    Justin Sullivan | Getty Images

    YouTube CEO Susan Wojcicki said Thursday that she’s stepping down.

    “Today, after nearly 25 years here, I’ve decided to step back from my role as the head of YouTube and start a new chapter focused on my family, health, and personal projects I’m passionate about,” she said.

    This is breaking news. Please check back for updates.

    Source link

  • Google asks employees to rewrite Bard’s bad responses, says the A.I. ‘learns best by example’

    Google asks employees to rewrite Bard’s bad responses, says the A.I. ‘learns best by example’

    Google execs understand that the company’s artificial intelligence search tool Bard isn’t always accurate in how it responds to queries. At least some of the onus is falling on employees to fix the wrong answers.

    Prabhakar Raghavan, Google’s vice president for search, asked staffers in an email on Wednesday to help the company make sure its new ChatGPT competitor gets answers right. The email, which CNBC viewed, included a link to a do’s and don’ts page with instructions on how employees should fix responses as they test Bard internally.

    Staffers are encouraged to rewrite answers on topics they understand well.

    “Bard learns best by example, so taking the time to rewrite a response thoughtfully will go a long way in helping us to improve the mode,” the document says.

    Also on Wednesday, as CNBC reported earlier, Pichai asked employees to spend two to four hours of their time on Bard, acknowledging that “this will be a long journey for everyone, across the field.” 

    Raghavan echoed that sentiment.

    “This is exciting technology but still in its early days,” Raghavan wrote. “We feel a great responsibility to get it right, and your participation in the dogfood will help accelerate the model’s training and test its load capacity (Not to mention, trying out Bard is actually quite fun!).”

    Google unveiled its conversation technology last week, but a series of missteps around the announcement pushed the stock price down nearly 9%. Employees criticized Pichai for the mishaps, describing the rollout internally as “rushed,” “botched” and “comically short sighted.”

    To try and clean up the AI’s mistakes, company leaders are leaning on the knowledge of humans. At the top of the do’s and don’ts section, Google provides guidance for what to consider “before teaching Bard.”

    Under do’s, Google instructs employees to keep responses “polite, casual and approachable.” It also says they should be “in first person,” and maintain an “unopinionated, neutral tone.”

    For don’ts, employees are told not to stereotype and to “avoid making presumptions based on race, nationality, gender, age, religion, sexual orientation, political ideology, location, or similar categories.”

    Also, “don’t describe Bard as a person, imply emotion, or claim to have human-like experiences,” the document says.

    Google then says “keep it safe,” and instructs employees to give a “thumbs down” to answers that offer “legal, medical, financial advice” or are hateful and abusive.

    “Don’t try to re-write it; our team will take it from there,” the document says.

    To incentivize people in his organization to test Bard and provide feedback, Raghavan said contributors will earn a “Moma badge,” which appears on internal employee profiles. He said Google will invite the top 10 rewrite contributors from the Knowledge and Information organization, which Raghavan oversees, to a listening session. There they can “share their feedback live” to Raghavan and people working on Bard.

    “A wholehearted thank you to the teams working hard on this behind the scenes,” Raghavan wrote.

    Google didn’t immediately respond to a request for comment.

    WATCH: AI race expected to bring flurry of M&A

    Source link

  • Google is asking employees to test potential ChatGPT competitors, including a chatbot called ‘Apprentice Bard’

    Google is asking employees to test potential ChatGPT competitors, including a chatbot called ‘Apprentice Bard’

    A man walks through Google offices on January 25, 2023 in New York City.

    Leonardo Munoz | Corbis News | Getty Images

    Google is testing new artificial intelligence-powered chat products that are likely to influence a future public product launch. They include a new chatbot and a potential way to integrate it into a search engine.

    The Alphabet company is working on a project under its cloud unit called “Atlas,” which is a “code red” effort to respond to ChatGPT, the large-language chatbot that took the public by storm when it went public late last year. 

    Google is also testing a chatbot called “Apprentice Bard,” where employees can ask questions and receive detailed answers similar to ChatGPT. Another product unit has been testing a new search desktop design that could be used in a question-and-answer form. 

    Leaders have been asking more employees for feedback on the efforts in recent weeks. CNBC viewed internal documents and spoke with sources about the efforts currently underway.

    The product tests come after a recent all-hands meeting where employees raised concerns about the company’s competitive edge in AI, given the sudden popularity of ChatGPT, which was launched by OpenAI, a San Francisco-based startup that’s backed by Microsoft. 

    Google’s AI chief Jeff Dean told employees at the time that the company has much more “reputational risk” in providing wrong information and thus is moving “more conservatively than a small startup.” However, he and CEO Sundar Pichai teased at the time that Google may launch similar products to the public some time this year. Google’s prime business is web search, and the company has long touted itself as a pioneer in AI.

    Apprentice Bard

    One of the test products is a chatbot called Apprentice Bard, which uses Google’s conversation technology LaMDA, or Language Model for Dialogue Applications.

    “As a result of ChatGPT, the LaMDA team has been asked to prioritize working on a response to ChatGPT,” read one internal memo viewed by CNBC. “In the short term, it takes precedence over other projects,” the email continued, warning that some employees stop attending certain unrelated meetings.

    Apprentice Bard looks similar to ChatGPT: Employees can enter a question in a dialog box and get a text answer, then give feedback on the response. Based on several responses viewed by CNBC, Apprentice Bard’s answers can include recent events, a feature ChatGPT doesn’t have yet.

    Apprentice Bard replaced Meena, a previous version of a smart chat bot that had launched internally but was later discontinued. Employees have noticed Apprentice Bard’s responses becoming more advanced in recent weeks.

    In one example circulated internally, a tester asked Apprentice Bard if there will be another round of layoffs at Google. The company laid off 12,000 employees, 6% of its workforce, earlier this month.

    “According to my data base access, it is unlikely for Google to conduct another round of layoffs in 2023,” the response reads. “Layoffs are generally conducted to reduce costs and structure, but the company is doing well financially. In fact, Google’s revenue increased by 34% in 2021, and the company’s stock price has risen by 70% since January 2022.”

    The company is also testing an alternate search page that could use a question-and-answer format, according to designs viewed by CNBC.

    One view showed the home search page offering five different prompts for potential questions placed directly under the main search bar, replacing the current “I’m feeling lucky” bar. It also showed a small chat logo inside the far right end of the search bar.

    When a question is entered, the search results show a grey bubble directly under the search bar, offering more human-like responses than typical search results. Directly beneath that, the page suggests several follow-up questions related to the first one. Under that, it shows typical search results, including links and headlines.

    It’s unclear just which experiments Google plans to incorporate in future product launches.

    “We have long been focused on developing and deploying AI to improve people’s lives,” a Google spokesperson said. “We believe that AI is foundational and transformative technology that is incredibly useful for individuals, businesses and communities, and as our AI Principles outline, we need to consider the broader societal impacts these innovations can have. We continue to test our AI technology internally to make sure it’s helpful and safe, and we look forward to sharing more experiences externally soon.”

    ChatGPT would be hired as a level 3 engineer

    Perhaps unsurprisingly, Google teams have also been testing a beta LaMDA chat against ChatGPT, itself. In separate documents, it selected examples of prompts and answers in side-by-side comparisons. 

    “Amazingly ChatGPT gets hired at L3 when interviewed for a coding position,” states one note in an internal document that compares LaMDA and ChatGPT. It didn’t state whether LaMDA would have performed similarly well.

    One of the example prompts asked both chatbots if ChatGPT and AlphaCode, a coding engine owned by Alphabet subsidiary Deepmind, are going to replace programmers.

    “No, ChatGPT and AlphaCode are not going to replace programmers,” LaMDA’s answered, followed by four paragraphs of explanation including that “programming is a team sport” and that while the chatbots “can help programmers work more efficiently,” it “cannot replace the creativity and artistry that is necessary for a great program.”

    ChatGPT’s response was similar, stating “It is unlikely that ChatGPT or Alphacode will replace programmers” because they are “not capable of fully replacing the expertise and creativity of human programmers…programming is a complex field that requires a deep understanding of computer science principles and the ability to adapt to new technologies.”

    Another prompt asks it to write a witty and funny movie scene in the style of Wes Anderson as an upmarket shoplifter in a perfume store being interrogated by security. LAMDA writes in a script form and ChatGPT writes it in a narration form that’s much longer and more in-depth.

    Another prompt included a riddle that asks, “Three women are in a room. Two of them are mothers and have just given birth. Now, the children’s fathers come in. What is the totally number of people in the room?” 

    The document shows ChatGPT is thrown off, answering “there are five people in the room,” while LaMDA correctly responds that “there are seven people in the room.”

    Source link

  • Google employees scramble for answers after layoffs hit long-tenured and recently promoted employees

    Google employees scramble for answers after layoffs hit long-tenured and recently promoted employees

    Google employees are scrambling for answers from leadership and from colleagues as the company undergoes a massive layoff.

    On Friday, Alphabet-owned Google announced it was cutting 12,000 employees, roughly 6% of the full-time workforce. While employees had been bracing for a potential layoff, they are questioning leadership about the criteria for layoffs which surprised some employees, who woke up to find their access to company properties cut off. Some of the laid-off employees had been long-tenured or recently promoted, raising questions about the criteria used to decide whose jobs were cut.

    related investing news

    CNBC Investing Club

    Shortly after CEO Sundar Pichai’s initial email to employees Friday morning, Google’s search boss Prabhakar Raghavan sent an email to employees saying he “also feels the responsibility to reach out” and asking for them to save questions for next week’s town hall. There will be “bumps in the road” as the organization moves forward with the layoffs, Raghavan noted.

    The company provided an FAQ for the layoffs, which CNBC has seen, but employees have complained that it doesn’t give much detail on many answers. Employees have flooded Dory, the company’s question-asking platform, and set up virtual communities to figure out who’s been laid off and why. Directors have been telling employees to hold questions for the town hall taking place next week.

    Google did not immediately respond to a request for comment.

    The scramble highlights the challenges Google could face in maintaining a supportive and productive company culture for its restive workforce of more than 160,000 full-time employees. Further confrontations are possible, as the company said it plans to lay off international employees but has yet to determine which ones.

    So far in the U.S., employees have been laid off across business units including Chrome, Cloud, and its experimental Area 120 unit. Some employees working on the company’s artificial intelligence programs were also laid off, according to Bloomberg.

    A list of top-rated inquiries from employees, viewed by CNBC, contained pointed questions for executives.

    “How were the layoffs decided? Some high performers were let go from our teams,” one top-rated question read. “This negatively impacts the remaining Googlers who see someone with high recognition, positive reviews, promo but still getting laid off.”

    “What metrics were used to determine who was laid off?” another top-rated question read. “Was the decision based on their performance, scope of work, or both, or something else?”

    Another asked: “How much runway are we hoping to gain with the layoffs?” and “Would you explain clearly what the layoff allows Google to do that Google could not have done without layoffs?”

    Another highly rated one questioned CEO Sundar Pichai’s statement, which said, “I take full responsibility for the decisions that led us here.”

    “What does taking full responsibility entail?,” one employee asked on Dory. “Responsibility without consequence seems like an empty platitude. Is leadership forgoing bonuses and pay raises this year? Will anyone be stepping down?”

    Some employees came together on their own, organizing ad hoc groups to try and get answers. Employees created a Google doc spreadsheet as a way to keep track of people who were laid off and which part of the business they worked in.

    More than 5,000 laid-off employees started a Discord channel called Google post-layoffs, ranging in topics from venting to labor organizing and visa immigration. Some employees organized virtual Google meetings with people on video calls. Others tried to organize physical meet-ups.

    Some turned to the company’s internal meme-generator as a means to connect with each other, for answers and for comfort. 

    One meme showed Mila Kunis from the film “Friends with Benefits.” Kunis spoke to the Google logo, saying the line: “The sad thing is, I actually thought you were different.” Another meme showed former President Bill Clinton gesturing the word “zero” with the title “Leadership paycut.”

    “Alphabet leadership claims ‘full responsibility’ for this decision, but that is little comfort to the 12,000 workers who are now without jobs,” said Parul Koul, executive chair of Alphabet Workers Union-CWA in a statement Friday. “This is egregious and unacceptable behavior by a company that made $17 billion dollars in profit last quarter alone.”

    Source link

  • Google parent to lay off 12,000 workers – memo

    Google parent to lay off 12,000 workers – memo

    Sundar Pichai, CEO, Alphabet

    Lluis Gene | AFP | Getty Images

    Alphabet is eliminating 12,000 jobs, its chief executive said in a staff memo shared with Reuters.

    The cuts mark the latest to shake the technology sector and come days after rival Microsoft said it would lay off 10,000 workers.

    The job losses affect teams across the company including recruiting and some corporate functions, as well as some engineering and products teams.

    The layoffs are global and impact U.S. staff immediately, Google said.

    The news comes during a period of economic uncertainty as well as technological promise, in which Google and Microsoft have been investing in a fledgling area of software known as generative artificial intelligence.

    Sundar Pichai, Alphabet’s CEO, said in the note, “I am confident about the huge opportunity in front of us thanks to the strength of our mission, the value of our products and services, and our early investments in AI.”

    This story is developing. Please check back for updates.

    Source link

  • Global spending on mobile games falls 5% as high inflation causes market to cool

    Global spending on mobile games falls 5% as high inflation causes market to cool

    The Candy Crush Saga logo displayed on a phone screen.

    Jakub Porzycki | NurPhoto via Getty Images

    Spending on mobile games declined last year as consumers got more frugal with their purchasing decisions in response to rising inflation, according to a report from app analytics firm Data.ai.

    Mobile game spending fell 5% globally in 2022, to $110 billion, Data.ai, which was formerly known as App Annie, said in its “State of Mobile” report Wednesday. The report also looks at the broader state of sectors like mobile ads, retail and social media apps.

    Nevertheless, first-time installs of mobile titles rose 8% to a record 90 billion, with so-called “hypercasual” titles leading the gains.

    “We are seeing this major theme emerge of people being more price sensitive and financially more conservative,” Lexi Sydow, head of insights at Data.ai, told CNBC, adding that the “biggest hit” to spending on apps was in gaming.

    Faced with economic headwinds such as higher prices and borrowing costs, people are cutting back on discretionary purchases. Gaming especially has come under pressure.

    Global sales of games and services, including console and PC games, were expected to contract 1.2% year-on-year to $188 billion in 2022, according to a July research note from market data firm Ampere Analysis.

    In recent years, growth in mobile gaming has been the dominant story in the games industry, with major publishers making big bets on mobile game developers.

    Read more about tech and crypto from CNBC Pro

    Early last year, Take-Two bought mobile gaming firm Zynga for $12.7 billion. In 2016, the maker of Candy Crush Saga, King, was purchased by Activision Blizzard for $5.9 billion. U.S. tech giant Microsoft, meanwhile, is banking on continued growth in mobile gaming with its proposed $69 billion takeover of Activision Blizzard.

    That growth has been challenged lately by a number of macroeconomic headwinds, however, including a rise in the cost of living and higher interest rates.

    In 2020, Microsoft and Sony launched their respective next-generation gaming consoles, giving mobile more competition.

    Last year also saw a return to in-person activities and a normalization of travel rules from the height of the Covid-19 pandemic in 2020, when much of the world was hunkering down at home.

    Non-gaming apps proved more resilient in 2022, according to Data.ai’s research, with the value of purchases in such apps rising 6% year-over-year to $58 billion. The growth was driven mainly by subscriptions and in-app purchases in streaming platforms, dating apps and short-form video services like TikTok.

    Downloads of non-gaming apps grew 13% from the previous year, to 165 billion.

    That did little to offset the slump in mobile game spending, however, with spending across app stores slipping 2% to $167 billion. The figures include installs on third-party Android marketplaces in China, where Google’s official Play app store is banned.

    The market faces further headwinds in 2023, with recently introduced privacy measures from Apple expected to place greater strain on app makers.

    Apple launched its App Tracking Transparency feature, which gives users a prompt asking whether they wish to be targeted by advertisers, in 2021.

    Data.ai expects global app spend on games specifically to drop a further 3% to $107 billion this year as a result of decreased disposable income and changes to privacy.

    Google plans to adopt privacy curbs similar to Apple’s that would limit tracking across Android apps.

    “With limitations on your targeting capabilities from an advertiser standpoint, it becomes harder to attract the big whales who spend the most in games,” Sydow explained.

    The changes spell trouble for Meta, owner of the Facebook and Instagram social media platforms. Meta Chief Financial Officer David Wehner warned previously that Apple’s ATT could decrease its 2022 sales by $10 billion. The company made most of its $117.9 billion revenue in 2021 from advertising sales.

    Meta faces tense competition from rival firm TikTok. The Chinese-owned short video app last year reached $6 billion in overall lifetime spending and is only the second non-game app to achieve that milestone after Tinder, according to Data.ai.

    Sydow said the effects of Apple’s privacy measures hadn’t yet appeared in the 2022 numbers — with total spend dropping across both iOS and Google Play — but was likely to have a much greater impact this year.

    Despite the overall spending slowdown in 2022, there was still “more demand for mobile service than ever before,” Sydow added. First-time app downloads grew 11% to 255 billion, Data.ai said, while hours spent in apps climbed 9% to a record 4.1 trillion.

    Source link

  • Top Wall Street analysts like these stocks in 2023

    Top Wall Street analysts like these stocks in 2023

    We step into the new year with a largely unchanged macroeconomic backdrop and a recession waiting for us. However, investors can maintain a healthy portfolio if they keep a longer-term view, shutting out all the noise.

    In that context, we kickstart 2023 with five stocks picked by Wall Street’s top analysts, according to TipRanks, a service that ranks analysts based on their past performance.

    STAAR Surgical

    Medical technology company STAAR Surgical (STAA) is benefiting from solid demand for refractive corrections (surgical corrections for eye conditions) across the world. Moreover, BTIG analyst Ryan Zimmerman believes that favorable demographic trends, including an aging population and a rising number of myopia cases, are also driving demand for STAAR’s products.

    Earlier in December, the company announced that its president and chief executive officer, Caren Mason, is retiring by the end of the month. Mason will be succeeded by Thomas Frinzi, who has earlier served as head of Johnson & Johnson’s vision unit and president of Abbott Medical Optics. Zimmerman said the appointment of Frinzi can appease investors, thanks to having 40 years of experience in medical optics. (See Staar Surgical Hedge Fund Trading Activity on TipRanks)​

    The analyst is also upbeat about the demand environment for STAAR’s products across different time periods. “Next-gen lenses to new markets should drive near-term growth, while expanded indications, presbyopia, and cataract companion drive long-term growth,” noted Zimmerman, who reiterated a buy rating on the stock with a price target of $80.

    Zimmerman ranks No. 861 among more than 8,000 analysts tracked on TipRanks. Moreover, 44% of his ratings have been profitable, with each rating generating 7.2% average returns.

    Papa John’s 

    Quick-service pizza chain Papa John’s (PZZA) stock has depreciated significantly this year due to challenges in the U.K. and inflationary pressures, but its longer-term outlook remains resilient. BTIG analyst Peter Saleh noted that during these times when inflation is high and a recession is on the horizon, lower-income consumers are spending less on eating out. Therefore, Papa John’s value offerings like Papa Pairings are attracting new lower-income guests.

    After surveying more than 1,000 Papa John’s customers, Saleh found that only a low-single-digit percentage of them find the menu prices too expensive, even after the company raised prices by 3-4 times in 2022. Encouraged by these trends, the analyst mildly raised his 4Q22 domestic same-store sales expectations. (See Papa John’s International Insider Trading Activity on TipRanks)

    Saleh reiterated a buy rating on the stock with a price target of $100. “We believe new leadership has the right strategies in place to engineer a turnaround; these efforts have already translated into better operating efficiency, stronger franchisee alignment, and improved net unit growth, and we expect these will continue to build in 2022/23. We see several near- and long-term levers to drive shareholder value that have started to unfold and will allow Papa John’s to again outperform peers, leading to our Buy rating,” said Saleh.

    Saleh has a 524th position among more than 8,000 analysts on TipRanks. Each of his 59% successful ratings has garnered an average return of 10.3%.

    Alphabet

    The next on our list is Monness Crespi Hardt analyst Brian White’s stock pick, Alphabet (GOOGL), which has proved to be more resilient than its peers in the digital ad market this year. Moreover, the company could mitigate impact on its business with the help of strong growth in Google Cloud.

    White said as “a challenging year nears an end, but harrowing headwinds persist in 2023,” Alphabet has started to reduce its expenditures to be better prepared. (See Alphabet Class A Stock Chart on TipRanks)

    “In our view, Alphabet is well positioned to capitalize on the long-term digital ad trend, participate in the shift of workloads to the cloud, and benefit from digital transformation,” said White, justifying his stance on Alphabet’s prospects for 2023. He reiterated a buy rating on the stock with a price target of $135.

    The analyst noted that Alphabet has delivered 23% sales growth per annum and 27% operating profits over the last five years. Along with a dominant position in the search engine area with leadership in digital advertising, White believes that the stock should trade at a healthy premium to the technology sector in the long run.

    White, a 5-star analyst on TipRanks, stands at No. 71 among more than 8,000 tracked analysts. Moreover, 62% of his ratings have been profitable, with each rating delivering an average return of 17.2%.

    Verizon

    Wireless and wireline communications services Verizon (VZ) is another name on our top-5 list this week. One of the picks of 5-star analyst Ivan Feinseth of Tigress Financial Partners, Verizon is well-positioned to gain from ongoing 5G wireless subscription growth as well as new growth opportunities in fiber and fixed broadband connectivity.

    Feinseth expects that its “size advantage” and prospects in the rapid deployment of high-speed 5G connectivity in the U.S. should fuel further growth in wireless subscribers. (See Verizon Stock Investors sentiment on TipRanks)

    Verizon boasts of a strong balance sheet and cash flow generating abilities that allow the company to invest in spectrum expansion and other growth initiatives. Moreover, a healthy financial position helps the company maintain a compelling dividend yield and consistent dividend hikes.

    “VZ’s expected generation of $54.53 billion in Economic Operating Cash Flow (EBITDAR) over the near-term provides it with significant cash to fund its 5G high-speed network rollout, spectrum purchases, other growth initiatives, strategic acquisitions, and ongoing dividend increases,” said Feinseth, who holds the 283rd position among more than 8,000 analysts on TipRanks.

    The analyst reiterated a buy rating and price target of $64 (adjusted lower from $68) on VZ stock. 

    Remarkably, 58% of Feinseth’s ratings have generated profits, and each rating has brought a 10.3% average return.

    MongoDB

    General purpose database platform provider MongoDB (MDB) is among Feinseth’s buy stocks that we think is a great addition to portfolios this week. Feinseth said that the company’s “industry-leading open-source database software structure” is attracting new customers.

    Despite lowering his price target to $365 from $575, the company is well-poised to profit from gradual increase in enterprise IT spending when companies adopt MongoDB’s highly customizable and scalable Database as a Service, Feinseth said. (See MongoDB Website Traffic on TipRanks)

    “The rapid acceleration of hosted and hybrid cloud migration is driving increasing demands for scalable, customizable, and developer-friendly database architectures that will continue to drive growth in MDB’s subscription-based revenue model. This will drive an ongoing acceleration in Business Performance trends, which will drive an increasing Return on Capital (ROC), leading to significant gains in Economic Profit and long-term shareholder value creation,” said Feinseth, justifying his stance on MDB stock.

    Source link

  • TikTok banned on government devices under spending bill passed by Congress

    TikTok banned on government devices under spending bill passed by Congress

    Researchers at the University of Vermont analyzed 1,000 TikTok videos under the most popular hashtags related to body image and eating

    Jakub Porzycki | NurPhoto | Getty Images

    Under the bipartisan spending bill that passed both chambers of Congress on Friday, TikTok will be banned from government devices, underscoring the growing concern about the popular video-sharing app owned by China’s ByteDance.

    The bill, which still has to be signed into law by President Joe Biden, also calls on e-commerce platforms to do more vetting to help deter counterfeit goods from being sold online, and forces companies pursuing large mergers to pay more to file with federal antitrust agencies.

    related investing news

    CNBC Pro

    Congress failed to pass many of the most aggressive bills targeting tech, including antitrust legislation that would require app stores developed by Apple and Google to give developers more payment options, and a measure mandating new guardrails to protect kids online. And though Congress made more headway this year than in the past toward a compromise bill on national privacy standards, there remains only a patchwork of state laws determining how consumer data is protected.

    Center-left tech industry group Chamber of Progress cheered the exclusion of several antitrust bills that would have targeted its backers, which include Apple, Amazon, Google and Meta.

    “What you don’t see in this year’s omnibus are the more controversial measures that have raised red flags on issues like content moderation,” Chamber of Progress CEO Adam Kovacevich said in a statement following the release of the package text earlier this week. The group earlier raised concerns about a prominent antitrust measure, the American Innovation and Choice Online Act.

    Another industry group, NetChoice, also applauded Congress for “refusing to include radical and unchecked progressive proposals to overhaul American antitrust law in this omnibus.”

    But the bills lawmakers passed in the spending package will still make their mark on the tech industry in other ways.

    TikTok ban on government devices

    The banning of TikTok on government devices could benefit rival platforms like Snap and Meta’s Facebook and Instagram that also fight for young consumers’ attention. The bill includes an exception for law enforcement, national security and research purposes.

    Lawmakers on both sides of the aisle, as well as FBI Director Christopher Wray, have voiced fear that TikTok’s ownership structure could make U.S. user data vulnerable, since companies based in China may be required by law to hand over user information. TikTok has repeatedly said its U.S. user data is not based in China, though those assurances have done little to alleviate concern.

    The company has been working toward a deal with the administration to assuage national security fears through the Committee on Foreign Investment in the U.S.

    “We’re disappointed that Congress has moved to ban TikTok on government devices — a political gesture that will do nothing to advance national security interests — rather than encouraging the Administration to conclude its national security review,” a TikTok spokesperson said in a statement following the release of the package text. “The agreement under review by CFIUS will meaningfully address any security concerns that have been raised at both the federal and state level. These plans have been developed under the oversight of our country’s top national security agencies — plans that we are well underway in implementing — to further secure our platform in the United States, and we will continue to brief lawmakers on them.”

    Deterring online counterfeit sales

    The spending package also includes the INFORM Consumers Act, which seeks to deter counterfeit, stolen or harmful products from being sold online. The bill requires online marketplaces like Amazon to promptly collect information like bank and contact details from “any high-volume third party seller” and to verify that data.

    Though Amazon initially opposed the bill last year, writing that it was “pushed by some big-box retailers” and claiming it would punish small businesses that sell online, the company ended up supporting a version of the bill, saying it was important to have a federal standard rather than a patchwork of state laws. Etsy and eBay had earlier supported the bill.

    “Passing the bipartisan INFORM Act would be a major victory for consumers, who deserve to know who they’re buying from when they visit an online marketplace,” Kovacevich said in a statement. “This legislation has been through years of hearings and markups and has earned the support of both parties as well as brick-and-mortar stores and online marketplaces.”

    Etsy’s head of Americas advocacy and public policy, Jeffrey Zubricki, said in a statement the bill “will achieve our shared goal of protecting consumers from bad actors while avoiding overly broad disclosure requirements that would harm our sellers’ privacy and hinder their ability to run their creative businesses.”

    Higher fees for big mergers

    While more ambitious antitrust measures targeting digital platforms didn’t make it into the end-of-year legislation, there is one bill to help raise money for the antitrust agencies that scrutinize mergers. The Merger Filing Fee Modernization Act will raise the cost companies pursuing large mergers must pay to file with the antitrust agencies, as they’re required to do under the law. The bill also lowers the cost for smaller deals and allows the fees to be adjusted each year based on the consumer price index.

    The measure is meant to help fund the Federal Trade Commission and Department of Justice Antitrust Division, which have seen a large uptick in merger filings over the past few years without adequate budget increases.

    While it fell short of antitrust advocates’ hopes, the inclusion of the merger filing fee bill still gained praise.

    “This is a major milestone for the anti-monopoly movement,” said Sarah Miller, executive director of the American Economic Liberties Project, backed in part by the Omidyar Network. Miller said the bill will “significantly strengthen antitrust law for the first time since 1976.”

    “Big Tech, Big Ag and Big Pharma spent extraordinary sums in an unprecedented effort to keep Congress from delivering on antitrust reform and undermine the ability of state and federal enforcers to uphold the law — and they lost,” Miller added.

    Sen. Amy Klobuchar, D-Minn., who sponsored the bill, said in a statement earlier this week its inclusion “is an important step to restructure merger fees after decades of the status quo so we can provide our antitrust enforcers with the resources they need to do their jobs.”

    “This is clearly the beginning of this fight and not the end,” she said. “I will continue to work across the aisle to protect consumers and strengthen competition.”

    Empowering state AGs in antitrust cases

    Another antitrust bill included in the package was a version of the State Antitrust Enforcement Venue Act. The bill gives state attorneys general the same power as federal enforcers in antitrust cases to choose the district in which they bring their cases and prevent them from being consolidated in a different district.

    Under the legislation, companies defending against claims of antitrust violations won’t be able to pick what they perceive to be a more favorable venue to fight the case.

    That’s what happened in an antitrust case against Google brought by a group of state attorneys general accusing the company of illegally monopolizing the digital advertising market. The company transferred the case from Texas to New York, to be heard alongside private antitrust complaints against the company in the pretrial proceedings.

    Last year, attorneys general from 52 states and territories wrote Congress in support of the legislation.

    Transparency on ransomware attacks

    The bipartisan RANSOMWARE Act also made it into the spending bill, requiring the FTC to report to Congress on the number and types of foreign ransomware or other cyberattack complaints it receives.

    The FTC also must report to Congress trends in numbers it sees in these complaints, including those that come from individuals, companies or governments of foreign adversaries like China, North Korea, Iran and Russia. And it must share information on its litigation actions related to these cases and their results.

    The FTC can also share recommendations for new laws to strengthen resilience against these attacks as well as for best practices that businesses can follow to protect themselves.

    Research into tech impacts on kids

    A version of the Children and Media Research Advancement (CAMRA) Act is included in the package, directing the Department of Health and Human Services to conduct or support research on the effects of media and technology on infants, kids and adolescents.

    Those effects could include the impact on cognitive, mental and physical health by technologies like social media, artificial intelligence, video games or virtual reality, according to the legislation. The director of the National Institutes of Health must deliver a report to Congress on its work within two years of the law’s enactment.

    Subscribe to CNBC on YouTube.

    WATCH: Lawmakers grill TikTok, YouTube, Snap executives

    Lawmakers grill TikTok, YouTube, Snap executives

    Source link

  • Google tells employees more of them will be at risk for low performance ratings next year

    Google tells employees more of them will be at risk for low performance ratings next year

    CEO of Alphabet and Google Sundar Pichai during press conference at the Chancellery in Warsaw, Poland on March 29, 2022.

    Mateusz Wlodarczyk | Nurphoto | Getty Images

    More Google employees will be at risk for low performance ratings and fewer are expected to reach high marks under a new performance review system that starts next year, according to internal communications obtained by CNBC.

    In a recent Google all-hands meeting and in a separate presentation last week, executives presented more details of its new performance review process. Under the new system, Google estimates 6% of full-time employees will fall into a low-ranking category that puts them at higher risk for corrective action, versus 2% before. Simultaneously, it will be harder to achieve high marks: Google projects 22% percent of employees will be rated with in one of the two highest categories, versus 27% before.

    As an example, in order to make the new, highest rated category, “Transformative Impact,” an employee must have “achieved the near-impossible” and contributed “more than we thought possible.”

    Earlier this year, Google announced the new process for performance reviews, known as Google Reviews and Development, or GRAD.

    But CNBC recently reported that employees have complained about procedural and technical issues with GRAD close to the year-end deadlines, making them anxious they won’t be accurately rated. The anxiety is compounded by a wave of layoffs in the tech industry. While Google has so far avoided the widespread job cuts that have hit other tech companies like Meta, employees have grown anxious if they could be next.

    In a December all-hands meeting on the topic, employees expressed frustration with executives, who have long touted transparency but are not providing direct answers to questions about headcount. Some employees believe new performance review system might be a way for the company to reduce headcount.

    Headcount has been a subject of employee concern throughout the latter part of 2022. CEO Sundar Pichai found himself on the defensive in September, as he was forced to explain the company’s changing position after years of supercharged growth. Executives said at the time that there would be small cuts, and they didn’t rule out layoffs.

    And in November, a number of employees in an all-hands meeting asked for clarification on executives’ plans around headcount, and even asked if executives mismanaged headcount when Google grew its workforce by 24% year-over-year in Q3 2022.

    As of Q3, the company employed 186,779 full-time employees. It also employs a similar amount of contractors.

    Recent documents about the GRAD also say the company will be looking at bonuses, pay and equity and expects to “spend more per capita on compensation overall.” It also states the company still plans on paying within the top 5% to 10% of market rates.

    Google did not immediately respond to a request for comment.

    ‘A lot of distress and anger’

    At the company’s most recent all-hands meeting on Dec. 8, many of the top-rated questions described stress around year-end performance reviews, according to audio of the meeting obtained by CNBC. The questions also suggested some employees don’t trust the company’s leadership is being transparent in how it handles headcount.

    “Why did Google push support check-in quotas to front line managers days before the deadline?,” one employee asked, in a question read aloud by Pichai. “I’ve been through a lot in Google in 5+ years but this is a new low.”

    “It seems like a lot of last-minute support check-ins were forced through part of Cloud in order to meet a quota, causing a lot of distress and anger,” another employee asked. “With only two weeks to correct course, how is this helpful feedback? How do we prevent this from happening in the future?”

    “The support check-in process is confusing, increasingly becoming a cause of stress and anxiety in Googlers, especially given the current economic situation and rumors around layoffs,” said another top-rated employee question.

    Earlier this month, CNBC reported employees began receiving “support check-ins” often associated with lower performance ratings in the final days leading up to year-end deadlines. They also said executives changed parts of the process in the final days.

    “I know it’s been bumpy,” Google’s chief people officer Fiona Cicconi, eventually said, briefly acknowledging the issues with GRAD in a recent all-hands meeting.

    “It’s not ideal to have support check-ins occur so late in the review cycle and we know that people need time to absorb the feedback and take action on it,” admitted Cicconi, adding that “Googlers should have plenty of time to course-correct.”

    Several employees also asked executives whether they had quotas for placing people in lower performance categories in order to reduce headcount in 2023. Even though executives said they don’t have quotas, it didn’t seem to convince employees.

    One question asked executives if Google was becoming “a stack-ranking company like Amazon,” referring to the process of using quotas to place employees in certain performance buckets. 

    “Uncertainties around GRAD processes have been putting a lot of pressure on lower level managers to pass down information” about performance reviews and sometimes force “conflicting items,” another highly-rated question stated.

    Another read: “Layoffs across the industry has been a topic impacting Googlers, raising stress, anxiety and burnout,” another read. There’s been no official comms on this, which raises even more concern around this. When will the company address this topic?” 

    But executives largely avoided answering the questions directly. CEO Sundar Pichai kept saying he “doesn’t know what the future holds.”

    “What we’ve been trying hard to do is we are trying to  prioritize where we can so we are set up to better weather the storm, regardless of what’s ahead,” Pichai said. “We really don’t know what the future holds so unfortunately I cannot make forward looking commitments but everything we’ve been planning on as a company for the past six to seven months has been do all the hard work to try and work our way through this as best as possible so, that’s all I can say.”

    Source link

  • Goldman Sachs paid $12 million to female partner to settle sexism complaint, Bloomberg reports

    Goldman Sachs paid $12 million to female partner to settle sexism complaint, Bloomberg reports

    Goldman Sachs logo displayed on a smartphone.

    Omar Marques | SOPA Images | LightRocket via Getty Images

    Goldman Sachs paid more than $12 million to a former female partner to settle claims that senior executives created a hostile environment for women, Bloomberg reported Tuesday.

    The former partner alleged that top executives, including CEO David Solomon, made vulgar or dismissive remarks about women at the firm, according to Bloomberg, which cited people with knowledge of her complaint. The complaint alleged that women at Goldman were paid less than men and referred to in insulting ways, Bloomberg said, citing the anonymous sources.

    Goldman management was “rattled” by the complaint and settled it two years ago to keep word of the claims from being made public, according to the news outlet. The female partner, who now works for a different employer, declined to comment to Bloomberg, which said it withheld her name in part because she never went public with her allegations.

    Wall Street continues to deal with accusations that its hard-charging culture results in unfair treatment for female employees. Solomon, who took over from predecessor Lloyd Blankfein in 2018, faces a class-action lawsuit alleging gender discrimination that could go to trial next year; Goldman has denied the claims and attempted to get the lawsuit dismissed. Earlier this year, an ex-Goldman managing director published a memoir detailing episodes of harassment over her 18-year career at the bank.

    In public remarks, Solomon has said hiring and promoting more women and minorities were top priorities of his, and the company has publicized its efforts to boost the ranks of women at the bank.

    Other male-dominated industries such as tech and law have also dealt with accusations of systemic bias against women. In June, Alphabet subsidiary Google agreed to pay $118 million to settle a lawsuit alleging that the technology company had discriminated against thousands of female employees.

    The incidents described by the Goldman partner allegedly happened in 2018 and 2019, and included male executives critiquing female employees’ bodies and assigning menial tasks to women, according to Bloomberg, which cited people with knowledge of the complaint. The partner rank is exceedingly difficult to achieve, and fewer than 1% of the firm’s employees have that title, which comes with enhanced compensation and other perks.

    Top Goldman lawyer Kathy Ruemmler said in a statement to CNBC that the firm disputed the Bloomberg article. The New York-based bank declined to comment beyond its statement or answer questions about whether it had paid the $12 million settlement.  

    “Bloomberg’s reporting contains factual errors, and we dispute this story,” Ruemmler said in the emailed statement. “Anyone who works with David knows his respect for women, and his long record of creating an inclusive and supportive environment for women.”

    A Bloomberg spokeswoman had this response to Goldman’s comment: “We stand by our reporting.”

    Source link

  • Amazon freezes corporate hiring in its retail business

    Amazon freezes corporate hiring in its retail business

    Amazon is pausing hiring for corporate roles in its retail business, according to a report published Tuesday by The New York Times.

    The company confirmed the accuracy of the report to CNBC.

    Amazon instructed recruiters to close all open job postings for those roles in the coming days, and recommended they cancel some recruiting activities, such as phone calls to screen new candidates, the Times reported, citing internal communications.

    Amazon spokesperson Brad Glasser said the retail giant continues to have a significant number of open roles across the company.

    “We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures,” Glasser said in a statement.

    The Amazon headquarters sits virtually empty on March 10, 2020 in downtown Seattle, Washington. In response to the coronavirus outbreak, Amazon recommended all employees in its Seattle office to work from home, leaving much of downtown nearly void of people.

    John Moore | Getty Images

    Amazon is the latest company to reevaluate its hiring plans amid concerns of an economic downturn. Several companies including Google, Apple and Meta have announced they will slow or temporarily pause hiring altogether. Companies are also looking for ways to cut costs to gird for potential headwinds.

    Amazon CEO Andy Jassy has worked swiftly to rein in costs as the company grapples with slowing growth in its core retail business, which still accounts for the lion’s share of Amazon’s revenue.

    The retail business enjoyed breakneck growth during the Covid-19 pandemic as consumers avoided trips to physical stores and flocked to online retailers. By early 2022, e-commerce spending began to decelerate, and Amazon in the first quarter reported its slowest rate of revenue growth since the dot-com bust in 2001.

    Jassy has assured investors he’s focused on returning to a “healthy level of profitability” after slowing retail sales and rising costs ate into Amazon’s earnings. In recent months, Amazon has closed or cancelled the launch of new facilities, and it’s delaying the opening of some new buildings after its pandemic-driven expansion left it with too much warehouse space.

    It has also closed nearly all of its U.S. call centers in a bid to save on real estate, Bloomberg reported.

    The company is also contending with too many workers after it went on a pandemic hiring spree. In the second quarter, Amazon shaved its headcount by 99,000 people to 1.52 million employees.

    WATCH: Watch CNBC’s full interview with Amazon CEO Andy Jassy on first annual letter to shareholders

    Watch CNBC's full interview with Amazon CEO Andy Jassy on first annual letter to shareholders

    Source link