Last week, Prabhakar Raghavan was relieved of duty as Senior Vice President of Search, becoming Google's "Chief Technologist."
An important rule to follow with somebody's title in Silicon Valley is that if you can't tell what it means, it probably doesn't mean anything. The most notorious example of this is when AOL employed "Shingy," a Digital Prophet, and if you have any information about what he did at AOL, please email me at ed@ezpr.com immediately.
Anyway, back to Prabhakar.
Although ostensibly less ridiculous, Raghavan has likely been given a ceremonial title and a job that involves "partnering closely with Sundar Pichai and providing technical direction," as opposed to actually leading it.
Back in April, I published probably my most well-known piece — The Man Who Killed Google Search. Using emails revealed as part of the Department of Justice's antitrust trial against Google over search, it told the tale of how Prabhakar Raghavan, then Google's head of ads, led a coup that began the slow descent of the world's most important website toward its current, half-broken form.
The key event in the piece is a “Code Yellow” crisis declared in 2019 by Google’s ads and finance teams, which had forecast a disappointing quarter. In response, Raghavan pushed Ben Gomes — the erstwhile head of Google Search, and a genuine pioneer in search technology — to increase the number of queries people made by any means necessary.
Though it's not clear what was done to resolve the "query softness" that Raghavan demanded was reversed, I hypothesize one of the moves involved rolling back changes to search that had suppressed spammy content. Google has since denied this, despite the fact that emails revealed as part of DOJ's trial involved Jerry Dischler — Raghavan's deputy at Google Ads at the time — specifically discussing rollbacks. From The Man Who Killed Google Search:
The March 2019 core update to search, which happened about a week before the end of the code yellow, was expected to be “one of the largest updates to search in a very long time. Yet when it launched, many found that the update mostly rolled back changes, and traffic was increasing to sites that had previously been suppressed by Google Search’s “Penguin” update from 2012 that specifically targeted spammy search results, as well as those hit by an update from an August 1, 2018, a few months after Gomes became Head of Search.
Prabhakar Raghavan was made Head of Search a little over a year later in June 2020, and it's pretty obvious how big a decline Google Search has taken since then. Results are filled with Search Engine Optimized spam, ads and sponsored content are bordering on indistinguishable from regular results, and the disastrous launch of Google's AI-powered "summaries" produced results that ranged from hilarious to actively life-threatening.
When Raghavan took over Search (Q3 2020), Google had just experienced its first decline in year-over-year quarterly growth since Q4 2012 — a 1.66% decline in growth that followed by a remarkable recovery, with double-digit year-over-year growth just as Prabhakar turned the screws on search, cresting to a ridiculous 61.58% year-over-year growth in Q3 2021.
Then things began to slow. Every quarter saw progressively lower growth, reaching a nadir in Q4 2022, when Google experienced a mere 0.96% year-over-year growth — something that one might be able to blame on the end of the opulent post-vaccine spending we saw across the entire economy, or the spiraling rates of inflation seen worldwide. And so, one would assume that growth would recover as the wider global economy did, right?
Ehhh. While Google experienced a recovery in its growth rates, it took until Q3 2023 to hit double digits again (11% year-over-year), hitting a high of 15.41% in Q2 2024 before trending down again in Q3 2024 to 13.59%.
The reason these numbers are important is that growth drives everything, and Prabhakar Raghavan drove the most consistent growth engine in the company, which grew 14% year-over-year in Q1 2024, until he didn’t. This context is key to understanding his “promotion” to Chief Technologist, a title that is most decidedly not a Chief Technology Officer, or any kind of officer at all.
Google has, for the most part, enjoyed one of the most incredible runs in business history, with almost an entire decade of 20% year-over-year growth, with a few exceptions, such as Q4 2012 (a few months into Raghavan's tenure at Google, where he started in ads) to Q3 2013, a chaotic period where Google fell behind Amazon in shopping ad revenue, bought Motorola Mobility for $12.5 billion (a 63% premium on its trading price) and seen a 15% year-over-year decline in pricing for its search ads (Google’s earnings also leaked early, which isn't good).
Yet growth is slowing, and isn't showing any signs of returning to the heady days where 17% year-over-year growth was considered a bad quarter. Google has deliberately made its product worse as a means of increasing revenue, spawning a trend of both remarkable revenue growth and worsening search results that started exactly when Raghavan took the wheel of its prime revenue-driver.
The chart tells another story — that this reckless and desperate move only worked for a little bit before growth began to slow again. Recklessness and desperation begets only more recklessness and desperation, and you’ll note that Google’s aggressive push into AI followed its dismal Q4 2022 quarter, where it nearly fell into negative growth (and when you factor inflation, it did).
If you’ll forgive the mixed metaphors, Google has essentially killed its golden goose — search — and is now in the process of pawning its eggs to buy decidedly non-magical beans, by which I mean data centers and GPUs, with Google increasing its capital expenditures in the financial year 2024 to $50 billion, equivalent to nearly double its average capital expenditures from 2019 to 2023.
Since becoming Head of Search, Raghavan also became the silent leader of most of Google's other revenue centers — Google Ads, Google Shopping, Maps, and eventually Gemini, Google's ChatGPT competitor, which might also explain his newly-diminished position within the company.
2024 was a grim year for Google and a grimmer one for Raghavan, starting in February with its Gemini Large Language Model generating racially diverse nazis (among other things), a mess that Raghavan himself had to apologize for. A few months later, Google introduced AI-powered search summaries that told users to eat rocks and put glue on pizza, which only caused people to remember exactly how bad Google Search already was, and laugh at how the only way that Google seemed to be able to innovate was to make it worse.
Raghavan is being replaced by Nick Fox, a former McKinsey guy who, in the emails I called attention to in The Man Who Killed Google Search, told Ben Gomes that making Google Search more profitable was "the new reality of their jobs," to which Ben Gomes responded by saying that he was "concerned that growth [was] all that [Google was] thinking about."
Fox has, to quote Google CEO Sundar Pichai, "been instrumental in shaping Google's AI product roadmap," which suggests that Google is going all-in on AI at a time when developers are struggling to justify using its models and are actively mad at both the way it markets them and the way they're integrated into Google’s other products.
I am hypothesizing here, but I think that Google is desperate, and that its earnings on October 30th are likely to make the street a little worried. The medium-to-long-term prognosis is likely even worse. As the Wall Street Journal notes, Google's ad business is expected to dip below 50% market share in the US in the next year for the first time in more than a decade, and Google's gratuitous monopoly over search (and likely ads) is coming to an end. It’s more than likely that Google sees AI as fundamental to its future growth and relevance.
As part of the Raghavan reorganization, Google is also moving the Gemini App team (the one handling Google's competitor to ChatGPT) under AI research group DeepMind, a move that might be kind of smart in the "hand the AI stuff to the AI people" kind of way, but also suggests that there is a degree of disarray at the company that isn't going to get better in a hurry.
You see, Raghavan was powerful, and for a time successful. He ruled with an iron fist, warning employees to prepare for "a different market reality" because "things [were] not like they were 15-20 years ago," and "shortening the amount of time that his reports would have to work on certain projects" according to Jennifer Elias of CNBC, which is exactly the kind of move you make when things are going poorly.
Replacing Raghavan with Nick Fox — a man who has only worked at either McKinsey or Google, and no, I am not kidding — is something that you do because you don't know what to do, and somebody's head has to roll, even if it's going to roll to the foot of a guy who's most famous for running Google's Assistant business, which is best known for kind of sucking and making absolutely no money.
There is a compelling case to be made that we are watching the slow, painful collapse of Google — a company best known for a transformational and beloved product it chose to ruin, helmed by a management consultant that has, for the most part, overseen the decay of its brand.
Google — like the rest of tech's hyper-scalers — has not had a meaningful new product in over a decade, with its most meaningful acquisition in years involving it paying $2.7 billion for an AI startup that barely made any money specifically to hire back a guy who quit because he was mad that Google wouldn't release an early version of Large Language Models in 2021.
This is a company bereft of vision, incapable of making money without monopolies, and flailing wildly in the hopes that copying everybody else will save itself from perdition — or, I should say, from the Department of Justice breaking it up.
Google is exactly the monster that Sundar Pichai and Prabhakar Raghavan wanted it to be — a lumbering private equity vehicle that uses its crooked money machine to demolish smaller players, except there are no more hyper-growth markets left for it to throw billions at, leaving it with Generative AI, a technology that lacks mass-market utility and burns cash with every prompt.
We are watching the fall of Rome, and it’s been my pleasure to tell you about how much of it you can credit to Prabhakar Raghavan, the Man Who Killed Google Search.
