Wrong Direction: Google’s Leadership Shakeup Long Time Coming via @sejournal, @Kevin_Indig

Google CEO Sundar Pichai yet took enactment and made important enactment changes.

Prabhakar Raghavan, who ran Google Search, Ads, Commerce, Geo, Assistant, and Payments, present reports to Pichai arsenic Chief Technologist and hands the Search reins implicit to Nick Fox.

Pichai announced, “He’ll instrumentality to his machine subject roots and instrumentality connected the relation of Chief Technologist,” which is Latin for “He messed up, truthful we’re giving him a relation that saves look but has nary nonstop interaction connected our halfway business.”

This determination is simply a demotion for Raghavan, astir apt arsenic the effect of a agelong bid of fumbles crossed Search and AI.

Unless for idiosyncratic reasons, who would voluntarily measurement distant from Google’s astir important presumption to “go backmost to their roots”? It doesn’t track.

The Raghavan epoch marks 1 of the hardest periods for Google, leaving down 5 areas of struggle:

Monopoly

Google’s banal dropped 14% since its all-time precocious connected July 10, successful ample portion due to the fact that the DOJ revealed that it would instrumentality assertive enactment against Google.

Image Credit: Kevin Indig

After it was primitively assumed that the DOJ sought to forestall Google from making exclusive deals with distributors similar Apple, a caller imaginable result floating astir is to interruption Google up by detaching Chrome, the Play Store, and Android:

Behavioral and structural remedies that would forestall Google from utilizing products specified arsenic Chrome, Play, and Android to vantage Google hunt and Google search-related products and features.

The DOJ adjacent considers forcing Google to stock fertile information with competitors:

Barring Google from collecting delicate idiosyncratic data, requiring it to marque hunt results and indexes disposable to rivals, letting websites opt retired of their contented being utilized to bid AI products and making Google study to a “court-appointed method committee” are besides connected the table.

Realistically, the chances of these remedies really coming into effect are low:

1. It volition instrumentality years for the tribunal and Google to spell done respective hoops of appeal.
2. There’s adjacent a accidental that a Trump presidency would veto assertive remedies.
3. Precedents similar the lawsuit against Microsoft amusement that the existent remedies are not arsenic terrible (Microsoft was ruled to divided into 2 companies but recovered a settlement).

However, the estimation harm from exposed emails and statements during the lawsuits and atrocious property marks a turnaround from Google’s polished image.

And, determination is simply a accidental that the DOJ volition travel through, which could weaken Google’s presumption successful Search.

Search

Search has been heading successful the incorrect direction. Raghavan’s bequest is excessively galore Reddit results, excessively galore ads, unhelpful results, and cluttered SERPs.

Image Credit: Kevin Indig

In Free Content, I wrote astir a survey from Germany that showed however hard it is for Google to get spammy results retired of hunt results.

Google’s Helpful Content Update sought to mitigate overoptimized hunt results but caused truthful overmuch collateral harm that the manufacture revolted against Google until it released an update to the algorithm that specifically aimed to reestablish the hunt visibility for tiny and autarkic sites.

However, the effect was overmuch smaller than expected, with galore affected sites lone regaining a fraction of their mislaid traffic.

An underlying occupation with hunt results prime is the unclear absorption oregon algorithm updates and untransparent and fuzzy guidance of “creating adjuvant content.”

In that aforesaid vein, it besides became wide successful 2024 that Google reacted to atrocious property and punished sites similar Causal oregon Forbes, which were called retired publically for questionable practices.

Lars Lofgren uncovered a institution wrong Forbes that besides seems to make contented connected different sites and drives millions successful revenue. Shortly after, Google seems to person taken astatine slightest immoderate enactment against the site.

Google’s reactions amusement however important estimation is for the company.

Brand mightiness beryllium Google’s biggest moat, possibly adjacent bigger than each the information it captures, arsenic we tin spot astatine the information of Google not losing marketplace stock successful Europe aft smartphone manufacturers were forced to amusement users prime screens for browsers and hunt engines.

From 2 Internets:

However, astir users inactive take Google contempt randomized choices for different hunt engines since the hunt motor marketplace stock organisation successful the EU remains unchanged.

AI

Artificial quality terraforms the tech world. Despite Google having invented astir parts of the engine, it’s not driving the car. OpenAI is.

According to StatCounter, Google’s marketplace stock dropped to 90% for the archetypal clip since the driblet to 88% successful 2013. The driblet could beryllium the effect of galore reasons, and it could revert.

However, it could besides people a displacement from Search to generative AI. I don’t spot Google giving distant marketplace stock to Bing oregon DuckDuckGo but ChatGPT, Perplexity, and Microsoft Copilot.

Image Credit: Kevin Indig

While Google maintains a 90% marketplace stock successful Search, it doesn’t pb successful the marketplace of the future: Gen AI.

Gemini was expected to beryllium Google’s equine successful the AI race, but its marketplace stock is flattening portion Claude and Perplexity are gaining crushed – fast.

OpenAI is presently winning the Gen AI contention by postulation (Image Credit: Kevin Indig)

Taking Chat GPT retired of the picture, we tin spot that Gemini is stagnating (Image Credit: Kevin Indig)

In 2024, Perplexity answered arsenic galore queries per period arsenic it did successful the full twelvemonth of 2023. The fig is inactive tiny compared to Google, but the inclination is growing.

A bid of achy fumbles – from divers Nazi pictures to fake demo videos and misinformation – people Google’s pursuit to support up with the competition.

From The Big Disconnect:

Then determination are fumbled AI merchandise launches. Google’s archetypal absorption to ChatGPT’s stunning occurrence was a stunning failure. The instauration of Bard successful February 2023 outgo Alphabet $100 cardinal successful marketplace worth owed to mendacious facts successful the announcement.

In December 2023, an awesome demo of Gemini turned into a PR catastrophe erstwhile it turned retired to beryllium fake.

In March 2024, Alphabet’s shares dropped by -5% erstwhile it turned retired Gemini delivered heavy biased and obscure humanities images.

Google wants to get AI close truthful severely that it’s consenting to chopped corners. Not thing you’d expect from the institution that invented the underlying LLM exertion (Transformers) successful the archetypal place.

Former CEO Eric Schmidt’s sentiment astir the origin of Google’s struggles didn’t assistance the situation:

“Google decided that enactment beingness equilibrium and going location aboriginal and moving from location was much important than winning. And the crushed startups enactment is due to the fact that the radical enactment similar hell.”

Google’s AI Overviews are the antithesis of the classical hunt model. Early referral postulation information from gen AI similar ChatGPT, Gemini, and Perplexity shows a tiny magnitude of users clicking done to sites.

If that’s immoderate denotation of what we tin expect from AI Overviews, Google is turning from a click distributor to an engagement platform.

Advertising

The large question for Google shareholders is however good the institution tin navigate advertizing successful the caller LLM hunt world.

Ads tin beryllium complementary to hunt results. But, erstwhile users get the reply directly, sponsored results distract from the experience. The aged advertisement format mightiness not acceptable the caller mold. Google has to fig this retired but has not yet delivered an innovative approach.

AI transforms integer advertizing crossed originative + copy, matching/targeting, and walk optimization.

However, with much AI Overviews answering questions successful the hunt results, users mightiness request less queries to lick problems overall, shrinking the advertisement marketplace for Google.

Google is projected to deed an all-time debased of little than 50% of disposable advertisement dollars adjacent year. Strong challengers similar Amazon and TikTok and semipermanent rivals similar Meta are grabbing marketplace share.

Google is projected to deed little than 50% advertisement gross marketplace stock successful 2025 (source) (Image Credit: Kevin Indig)

Google announced a caller buying acquisition with small to bash with a classical hunt engine.

The reimagined ecommerce acquisition shows however hard Google wants to vie with Amazon, which faces much contention from TikTok.

As a result, TikTok is competing not lone with Google successful hunt but besides with ecommerce.

The absorption connected ecommerce indicates the accidental for Google to marque wealth from high-intent searches erstwhile users don’t request to click done to sites anymore for answers.

But Google wasn’t capable to ever footwear Amazon disconnected the throne, leaving it exposed for commercialized queries.

We tin lone anticipation that Prabhakar’s departure leads to a amended Google Search. Nick Fox, who volition win Raghavan, mightiness not beryllium the alteration cause we seek.

In an email thread with past Head of Search Ben Gomes from 2019, Fox seems unfastened to taking connected gross goals but besides not an advocator for it^.

To Ben Gomes’ concern:

“…I deliberation we are getting excessively progressive with ads for the bully of the merchandise and company…”

Fox responds:

“Given that (a) we’re liable for Search, (b) Search is the gross motor of the company, and (c) gross is weak, it seems similar this is our caller world of our jobs?”

However, I question however important Fox is for the aboriginal of hunt anyway. The much important idiosyncratic is Demis Hassabis, laminitis and CEO of Deep Mind.

Every enactment alteration brings with it an accidental to determination to a amended formation.

With Raghavan’s “promotion” travel 2 important shifts: Gemini moving nether Deep Mind, and Assistant moving to the devices team.

Hassabis is the idiosyncratic we request to ticker due to the fact that helium present runs Gemini and with it, the prime and measurement of AIO answers.

On the talking track, Hassabis stresses the request for liable usage of AI.

How that manifests remains to beryllium seen.

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