Google search boss warns employees of 'new operating reality,' urges them to move faster

🌈 Abstract

The article discusses the challenges faced by Google's search business and the changes being implemented by Prabhakar Raghavan, the head of Google's search, ads, maps, and commerce divisions. Raghavan addressed Google employees, warning them that the search industry has changed significantly in the past 15-20 years and that Google needs to adapt to a new market reality.

🙋 Q&A

[01] Raghavan's Message to Employees

1. What were the key points Raghavan made in his address to Google employees?

• Raghavan told employees that "things are not like they were 15-20 years ago" and that the search industry has changed significantly.
• He noted that user behavior is changing, competition is heating up, and regulation is becoming a bigger challenge for Google.
• Raghavan announced that he is shortening the amount of time his reports have to work on certain projects in an effort to move faster.
• He emphasized the need for Google to "twitch faster" and adapt to the new market reality.

2. What specific changes did Raghavan announce?

• Raghavan said Google plans to build teams closer to users in key markets like India and Brazil.
• He revealed that he is shortening the amount of time his reports have to complete certain projects to move faster.
• Raghavan also mentioned that Google's cloud business has instructed employees to move within shorter timelines despite having fewer resources after cost cuts.

3. What challenges did Raghavan highlight that Google is facing?

• Heightened competition, particularly from Microsoft and OpenAI in generative AI
• A more challenging regulatory environment, citing the European Union's Digital Markets Act
• The need to adapt to changing user behavior and a "new cost reality" with increased spending on machines for generative AI

[02] Google's Shifting Priorities

1. How has Google's growth and profitability changed in recent years?

• Raghavan noted that Google's digital ad business had become "the envy of the world," with revenue growing by more than $100 billion over the last three years, exceeding the combined revenue of Starbucks, Mazda, and TikTok.
• However, he acknowledged that organic growth is slowing and the number of new devices coming into the world "is not what it used to be," meaning Google's growth "has to be hard earned" in this new operating reality.

2. What changes has Google made in response to these challenges?

• Google has been in cost-cutting mode since early 2023, with plans to eliminate about 12,000 jobs and restructure its finance organization.
• Raghavan praised the teams working on Gemini, Google's main group of AI models, for working 120 hours a week to quickly fix issues with the company's image recognition tool.
• Raghavan also said Google is actively working on removing unnecessary layers in the company's hierarchy to address employee complaints about bureaucracy.

3. How is Google's focus shifting in response to the rise of generative AI?

• Raghavan acknowledged that Google is "spending a ton more on machines" for generative AI, which is part of the "new cost reality" the company is facing.
• He praised the teams working on Gemini, Google's AI models, for their efforts to quickly fix issues with the company's image recognition tool.
• Raghavan indicated that Google is focusing on moving quickly and efficiently on AI-powered projects, even if it means using smaller teams rather than throwing large numbers of engineers at the problems.