I'm sad. I'm sad not just because Elon Musk of Tesla (TSLA) called me a "Shallowfake" -- the first time since the second grade, when my dad let me have it for getting a B on my report card. (I never let that happen again.)
No, I'm sad because I have to say negative things about a person and a company I like so much. I have to say negative things about Alphabet (GOOG) , (GOOGL) -- a company that in many ways doesn't deserve to be one of the FANGs any more. After GOOGL's latest results, I question whether the company still belongs in that quartet at all.
My issue with Alphabet Chief Financial Officer Ruth Porat? I think you have to acknowledge when you missed on earnings. I think you have to say that "our ad revenue has decelerated and we are not going to let that happen again. We are going to take back what we lost and not lose our search-advertising crown."
But it seems as if the company is constitutionally unable to admit that it let anyone down -- most importantly itself -- which is in order here because humility is in order here.
I've read the transcript to the company's earnings call several times. I don't think the company recognized that it's simply not selling hard enough to make up for the currency hit (which is what Alphabet must do).
When you miss by $1 billion, you know some of that's happening because others in the space -- notably Facebook (FB) and Amazon (AMZN) -- are taking market share. Now, Alphabet won't acknowledge that, but I have a better panoply -- a better dashboard -- than they do.
I talk to or read about every major vertical that needs to reach people on the Web, and the money is flowing away from Google. That's true even though it makes so much sense to use Google because when you Google something you want something -- and if it's something you need to buy, Google becomes the point of sale. But now, Amazon is becoming the point of sale.
But Alphabet's problems are even deeper than that. Frankly, I question if they know how to deal with the enterprise.
I question if they recognize how pissed off so many partners of theirs are when it comes to the endless formulation changes to keep customers on their toes. Personally, I'm sick of being on my toes.
They're beefing up their cloud business, but again, they never admitted that they fell behind -- so far behind that they had to go outside for help. And they'll have to spend billions to catch up with Amazon Web Services and Azure from Microsoft (MSFT) . Both of those businesses are truly kicking Alphabet's butt.
Before the quarter print, we got so excited about the premium paid YouTube or Alphabet's video-game initiative that maybe we figured it would no longer be the same old arrogant Alphabet. But that was wrong. Very wrong -- $1 billion wrong.
One last thing: Alphabet has lost the analysts' confidence. Most were simply mystified why it had such a bad quarter.
As old pro Ross Adam Sandler started his question on the call: "I guess I'll just beat the dead horse on the deceleration comment again." Meaning that he, too, was desperate to try to figure out why things had become so disappointing not compared to all of the other companies out there, but compared to GOOGL's historical superiority.
The company provided no answers, so I will. Sloppy execution. Inability to sell. And most importantly, they got their butts kicked by hungrier, smarter companies.