According to news on April 24, at last month’s all-hands meeting, Prabhakar Raghavan, head of Google’s search business, reminded employees to adapt to the “new operating environment” and urged them to speed up their actions.
As the head of Google's core departments of search, advertising, maps and commerce, Raghavan reports directly to Google CEO Sundar Pichai. He spoke at the conference to the 25,000 full-time employees of Google's knowledge and information division.
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The audio of the meeting shows that Raghavan pointed out when talking about the search business:“We have to recognize that the current situation is very different from what it was 15 to 20 years ago.”As the long-term dominant player in search, Google has become one of the most profitable and valuable companies in the world.
Raghavan also mentioned that Google's digital advertising business is “the envy of the world.” He emphasized that in the past three years, Google's annual digital advertising revenue has grown to more than $100 billion, which is more than Starbucks, Mazda and TikTok combined.
Although Google is well-known in Silicon Valley for its free lunches and generous campus benefits, Raghavan warned that growth is becoming increasingly difficult for Google.
He said frankly: “Life can't always be smooth sailing.”
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During his roughly 35-minute speech, Raghavan repeatedly used sports metaphors and rallying cry.
He said: “If the market reality is clear, we need to react quickly like athletes.” He mentioned the intensification of competition and the challenges of the regulatory environment. Although he did not specify specific opponents, Google is facing the challenge from Microsoft in the field of generative artificial intelligence. and competitive pressure from OpenAI.
“People choose us because we are trustworthy,” Raghavan said. “They may be attracted by novelty, but ultimately they still go to Google to verify what they see because Google is a trusted source. In this world of generative artificial intelligence In the era of intelligence, this has become even more important.”
In his speech, Raghavan also announced some specific adjustment measures. He said that Google plans to add teams closer to users in markets such as India and Brazil, and revealed that it is shortening the completion time of certain projects to speed up the process.
“We can learn by increasing the speed and frequency of execution,” he noted.
People familiar with the matter said that despite the reduction in resources after cost cutting, Google's cloud computing business unit also asked employees to move faster.
A Google spokesperson said in response to Raghavan's speech: “We are focused on taking action quickly in the face of huge opportunities.” The spokesperson emphasized Google's efforts to add generative artificial intelligence to its search business and improve search quality. And added: “There’s more to come.”
In March this year, Google appointed senior employee Elizabeth Reid as vice president of search business, reporting to Raghavan.
“Highs and Lows”
Many of the things Raghavan mentioned in his speech were not brought up for the first time. Google has been cutting costs since parent company Alphabet announced in early 2023 that it would lay off about 12,000 people. Google’s layoffs are continuing this year, with even more layoffs in early 2024. Google Chief Financial Officer Ruth Porat said in a memo last week that the company is reorganizing its financial department and layoffs are part of it.
But Raghavan made it clear that the current situation is not just a continuation of 2023. He noted that although it was only three months since the last plenary session, for some it felt as if three years had passed.
Raghavan said, “The past three months have been a lot of ups and downs, with highs and lows.”
During that time, Google launched its artificial intelligence image generator. Google decided to pull the feature in February after users discovered and posted false content. As more and more users turn away from traditional internet searches to get information, Google is restructuring its business to stay ahead of the competition in artificial intelligence.
Alphabet is expected to report its latest quarterly earnings on Thursday, with expectations that the company will post year-over-year revenue growth for the second consecutive quarter. While this growth rate is an improvement from previous quarters, the improvement is limited compared to Google's worst past performance.
Alphabet's revenue and profit exceeded expectations last quarter, but the company's stock price fell more than 6% because revenue from its advertising business did not meet market expectations. At the same time, rapid developments in the field of artificial intelligence are attracting investors' attention again.
“We're now entering a whole new cost era,” Raghavan said. As companies invest heavily in generative AI, they're spending significantly more on hardware, he explained.
“Organic growth is slowing down and new devices are not coming to market in as many numbers as they used to,” Raghavan added.
He also said: “This means that in this new operating environment, if we want to achieve growth, we have to work harder.”
Raghavan also said there are increasing challenges as the company “moves forward in a regulatory environment that is different from what it has been in the past.”
He talked about the EU's recently implemented Digital Markets Act and said the company was also evaluating what new requirements the European Commission would impose on Google. The bill, aimed at cracking down on anti-competitive behavior by technology companies, came into effect last month.
“It really affected us,” Raghavan admitted.
He urged employees to “seize this historic moment” and “act based on the current state of the market.”
“While it won't be easy, this is a critical moment that will determine our destiny,” he said.
120 hours per week
Raghavan said Google must address “systemic” challenges and rebuild competitiveness that may have been overlooked.
Raghavan specifically praised the team responsible for developing the artificial intelligence model Gemini. He noted that these team members increased their work weeks from 100 hours to 120 hours to quickly resolve bugs in Google's image generation tools. He said that the team solved about 80% of the problems in just ten days.
Despite this, Google has yet to restore the ability to generate images of people. After the tool was removed from the shelves in February this year, Google's head of artificial intelligence, Demis Hassabis, said that the feature would be back online within a few weeks.
Raghavan clarified that the failure of the image-generating tool was not due to insufficient employee effort. “I want to be clear, this is not because someone slacked off and messed up,” he stressed.
Raghavan noted that the company has proven its ability to act quickly on critical matters. He mentioned that the Bard and Magi teams, which focus on artificial intelligence search functions, launched new products within a few months last year.
He also hinted that having more manpower does not mean the mission will be accomplished. “We realize that even if we put 2,000 engineers on these projects, we may not be able to complete the task,” Raghavan revealed, indicating that the company will pay close attention to the size and efficiency of the team.
Raghavan also responded to criticism about corporate bureaucracy. Employees have long complained that Google's growing bureaucracy hinders the rapid release of products, a problem that has become increasingly serious in recent years.
In 2022, in addition to conducting Google's annual survey Googlegeist, CEO Pichai also launched an event called “Simplicity Sprint” to collect employee feedback on improving work efficiency.
Raghavan pointed out: “To turn a good idea into a market product requires excessive approvals, which is not Google's style.” He emphasized that this should not be the normal way of operation.
He revealed that leadership is actively eliminating unnecessary layers, in line with Pichai's earlier comments.
“We have gained a lot in the last few quarters,” Raghavan said. “I can't say we've solved them all. But the key is how we respond and learn from them.”