A Requiem for Prabhakar Raghavan

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3:31Hello and welcome to Better Offline. I'm your host, Ed Zitron.

3:46When Princess Diana died in 1997, Elton John rewrote his famous song Candle in the Wind, changing the lyrics subtly as a tribute. I did the same thing for this episode about Prabhagar Raghavan of Google. However, when I told Cool Zone Media about my plans, Robert Evans threatened me with, and I quote, a trip to the carnival prison, and then sent me a low-quality JPEG of a gun. As a result, I will be neglecting to release Candle in the Toilet for the time being. Nevertheless, it's both my duty and my pleasure to reveal that Prabhagar Raghavan, one of Better Offline's most notorious villains and the former head of Google Search, was relieved of duty last week, becoming Google's first chief technologist.

4:24Now, it's very important to know, it's an important rule to follow, with somebody's title in Silicon Valley that if you can't tell what it means, it probably doesn't mean anything, with the notorious example of AOL Shingy, their digital prophet, being my favourite. Although this one's a little less ridiculous, Raghavan has likely been given a ceremonial title in the job that involves, and I quote, partnering closely with Sundar Pichai and providing technical direction. You know, as opposed to actually leading it. If you're confused, forgetful, or just love hearing me speak, let me give you a brief rundown of who Prabhagar Raghavan is, or indeed was.

4:59Back in April, I ran probably my most well-known episode, The Man That Destroyed Google Search. Using emails revealed as part of the Department of Justice's antitrust trial against Google over their monopoly over search, I told the tale of how Prabhagar Raghavan, then Google's head of ads, led a coup that began the slow descent of the world's most important website towards its kind of broken, half-working, shitty thing that you see today and have for the last few years. The key event in the podcast was a code yellow crisis declared in 2019 by Google's ads and finance teams, which had forecast a disappointing quarter indeed.

5:32In response, Prabhupada Raghavan pushed out Ben Gomes, then the head of search, and a genuine pioneer in search technology, by the way. He'd been there forever, and he pushed him to increase the number of queries people made by any means necessary. Now, you may think, queries on Google, is that such a bad thing? Well, when you're optimizing a search engine to make people search more rather than getting the search engine results they need, you're doing so that they can see more ads. It's not great. And though it's not clear what was done to resolve the so-called query softness that Raghavan demanded was reversed, I hypothesized one of the moves involved rolling back changes to search that suppress spammy content.

6:09Google has since denied this in a response to my newsletter, despite the fact that emails revealed as part of the same Department of Justice trial, revealed that Jerry Dishler, Raghavan's deputy at Google Ads at the time, specifically discussed rollbacks as a means of increasing queries. And what's also lovely about this, and I'll link to this in the notes, by the way, is their response didn't really attack anything I had to say. They just say, oh, it's ridiculous what he said. They refused to give any true data. But I'm going to quote the man destroyed Google Search now to kind of run this down.

6:42The March 2019 core update to search, which happened about a week before the end of the code yellow, was expected to be, and I quote, 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 August 1st, 2018, a few months after Ben Gomes became head of search. Prabhagar 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.

7:19Results are filled with SEO garbage, that's search engine optimization, by the way, ads, sponsored content that's pretty much impossible to tell from regular results, and the disastrous launch of Google's AI-powered summaries, which produced results that range from hilarious, like telling you to eat rocks, or life-threatening, like telling you a mushroom is safe to eat that will kill you. And I think that Prabhagar Raghavan's reign at Google can be seen as an illustration of much larger problems at the company. Now, for the next bit, please take a look at the episode notes and go to tinyurl.com slash BO1020.

7:54This will be in the notes, because you're going to want to look at the chart I'm referencing, but I'm really going to try my hardest to get the most of it out verbally as well. If you're driving your car, if you're currently prizing open a window to steal a granny's purse from her car. I'll get it. I'll get it. Anyway, when Prabhagar Raghavan took over Search in 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 was followed by a remarkable recovery with double-digit year-over-year growth just as Prabhagar turned the screws on Search, cresting to a ridiculous 61.58 % year-over-year growth in Q3 2021.

8:33Then things began to slow. Every quarter saw progressively lower growth, reaching an adhering 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, maybe. But it could be something else, right? And you'd assume Big G will work this out, right? They'll recover as the wider economy did, right? Not so much. While Google experienced the degree of recovery in its growth rates, it took until Q3 2023 to hit double-digit growth again, 11 % year-over-year, hitting a high of 15.41 % in Q2 2024, before trending down again in Q3 2024 to 13.59%.

9:22The reason these numbers are important is that growth drives everything at Google, and Prabhupada Raghavan drove the most consistent growth engine in the company, Search, which grew 14 % year over year in Q1 2024, right up until he stopped piloting it. The context is key to understanding his, I don't know if you call it a promotion, a demotion, or just a room with no door handle on it, which they put him in every morning. But this title is most certainly not a chief technology officer or any kind of officer or executive 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 after Regavan began 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, and by the way, that's 63 % more than its trading price, and then they saw a 15 % year-over-year decline in pricing for their search ads.

10:26Google's earnings also leaked early in this period, which was not a lot of fun for Google at all. But growth is slowing again, and it isn't showing any signs of returning to the heady days where 70 % year-over-year growth each quarter was considered bad. Google has deliberately made its products worse as a means of increasing revenue and increasing growth, spawning a trend of both remarkable revenue growth and worsening search results that start exactly when Prabhupada Raghavan took the wheel. The chart I'm quoting tells another story too, though. The twist in Google search to make it more profitable only worked for a little bit before growth began to slow again.

11:03Recklessness and desperation begets only more recklessness and desperation. And you'll notice that Google's aggressive push into AI followed its dismal Q4 2022 quarter, where it nearly fell into negative growth. And when you factor in inflation, it actually did.

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12:52Elevate your listening experience to new heights, because let's be real, your music deserves it. The future of sound is now with LG XBoom. And for a limited time, save 25 % at LG.com with code FALL25. Bring the boom! XBoom. There's a lot going on in Hollywood. How are you supposed to stay on top of it all? Variety has the solution. Take 20 minutes out of your day and listen to the new Daily Variety podcast for breaking entertainment news and expert perspectives. Where do you see the business actually heading? Featuring the iconic journalist of Variety and hosted by co-editor-in-chief Cynthia Littleton.

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14:18Now, if you forgive the mixed metaphors, Google has essentially killed its golden goose, Search, and now is in the process of pawning its eggs to buy decidedly non-magical beans. In this case, 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 CapEx from 2019 to 2023. Since becoming head of search, Raghavan has also become the silent leader of most of Google's other revenue centers, Google Ads, Google Shopping, Maps, and eventually Gemini, Google's ChetGPT competitor, which might also explain why he's now been put in the naughty chair.

14:56You see, 2024 wasn't a great year for Google, and it was a much worse one for Prabhakar Raghavan, starting in February, when Gemini, their large language model, generated racially diverse Nazis, and among other things, a mess that Prabhagar Raghavan himself had to apologise for. This man never pokes his head up, but he had to in February. 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 had got, and laugh at how the only way that Google seemed to be able to innovate was to make it worse.

15:32Raghavan is being replaced by Nick Fox, a former McKinsey guy who, in the emails I called attention to in the podcast I've been talking about, told Ben Gomes that making Google search more profitable was, and I quote, 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. Yeah, that'd be terrible, wouldn't it? Now, Nick Fox has, to quote Google CEO Sundar Pashai, been instrumental in shaping Google's AI product roadmap, which suggests that Google is going all in on artificial intelligence at a time when developers are struggling to justify using its models and are actively mad at both the way in which it markets them and the way in which they're integrated into Google's other products.

16:11I'm hypothesizing here, but I think that Google is desperate and that its earnings on October 30th are likely to make the street more than a little worried. The medium to long-term prognosis is likely even worse too. As the Wall Street Journal notes, Google's ads business is expected to dip below a 50 % market share in the US in the next year for the first time in more than a decade, which by the way was right around where things were kind of bad for them. And Google's gratuitous monopoly over search, and likely ads by the way, is coming to an end. It's not an if, it's a when. It's more likely that Google sees AI as a fundamental part of their future growth, despite the fact that this thing only loses money and people really don't like it.

16:52As part of the Ragavan reorganization, Google is also moving the Gemini app team, the one handling the chat GPT competitor I've been talking about, onto AI research group DeepMind, a move that might be kind of smart in the hand-the-AI-to-the-AI people kind of way, but also suggests that there's just this degree of disarray at the company. And I don't think that's getting better in a hurry. You see, Ragavan was powerful, and for a time successful. He ruled with an iron fist, warning employees a few months ago to prepare for a different market reality because, and I quote, things were not like they were 15 to 20 years ago.

17:26Yeah, back when he worked at Yahoo. And he then would proceed to say that he was 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. This also kind of reflects things that I've heard from internal Googlers, whether resources are going to AI or they're going nowhere else. The same deal with Microsoft. We're in a group delusion, folks, it's not brilliant. But let's get back to the other fella. Replacing Raghavan is Nick Fox, a man who has only worked to either McKinsey or Google, and I am not kidding, by the way.

17:59He was at McKinsey for a few years, then has been at Google ever since. It's completely bonkers. And I mean, this is the kind of move you make, putting a guy like Nick Fox on top. It's something you do because you don't know what to do. And somebody needed to get fired or moved into the naughty box. Something had to change. And well, it was Prabagar. And what's crazy is that you think they'd find a guy with a history of success with a product that people love that's doing really well, that's making a bunch of money, right? Well, you'd be wrong because Nick Fox is most famous for running Google's assistant business, which if you Google how customers feel about it, they hate it.

18:35And it's really just famous for kind of sucking and literally making them no money. Google Assistant is a loss, loss, lossy, lossy product. It loses so much money, like a bunch of other assistant companies. Look at Amazon Alexa, losing them over$10 billion. It's ridiculous. This is the guy who's running Google's revenue. I'm scared. Well, I'm not scared. It would be kind of funny if Google started collapsing. I'd enjoy watching. Or I don't know, they could make themselves better. Who knows? Anyway, I'd argue there's a compelling case that can be made that we're watching the slow, painful collapse of this company.

19:12Google was at one point known for making these transformational, beloved products. And then they chose to put people in power to make them worse, to make them more money. And maybe what we're watching here is kind of the net result of the rot economy. When a rot economist is given the wheel, you get these early pops when things are going well. Number go up so fast, so hard. Number so good, so big. We love number. But the problem is, if you're just destroying the products, if you're squeezing your customers, if you're invading their lives more as a means of making this money, what do you fall back on when growth goes away?

19:50How do you inspire your customers when things suck ass? The answer is you don't. And just like the rest of the hyperscalers, Google has not had a meaningful new product in over a decade, and its most meaningful acquisition in years involved paying$2.7 billion to buy Character.ai to hire back a guy who quit because he was mad that Google wouldn't release an early version of a large language model in 2020 or 2021. It's unclear when that happened. And Noam Shazir was someone they shouldn't have let go, but at the same time, it's like, is this guy really going to turn things around? Seriously, Google is just a company bereft of vision, and they're incapable of making money without their monopolies, and they're just flailing wildly in the hopes that copying everybody else's shit will make them good, will save them from perdition.

20:39Or maybe stop the Department of Justice breaking them up, which I think is going to happen, albeit it might take a while. No, Google is exactly the monster that Sundar Pichai and Prabhagar Raghavan wanted it to be. This lumbering, ugly 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 the billions at. And now they're left with generative AI, a technology that lacks any mass market utility, and burns cash with every single prompt. I know it's a bit dramatic to suggest that we're watching Google die, but I've done it with Facebook, so why not today?

21:17and seriously Prabhupada Raghavan's time at Google coming to an end is a sign that they've realized that something is broken that they know something has to change but it also is a sign that this company doesn't know what has to change because they put a fucking McKinsey guy at the top and yes I know he's more a Google guy than a McKinsey guy but if you look back at the emails and I will link to them in the notes you will see that Nick Fox was not on the side of Ben Gomes or Shashi Thakur and the people trying to save Google search from the rot economists no Nick Fox is as much. He's just as bad as Prabhupada Raghavan, except he has a worse tenure at Google.

21:51Google Assistant sucks. It's not a great product. They're shoving AI into it. I get emails every week from someone saying, can you do a thing on Google Assistant? I don't want to because all I'd be saying for half an hour is Google Assistant is crap. Google Assistant is getting worse. Everyone's mad at Google Assistant. Why is Google Assistant so bad? And the, well, I actually don't have an answer for that, but I do have an answer for who's running all of Google's stuff now, who's running Google search and a bunch of other things. It's the guy who made the extremely unprofitable thing that people hate that's an also ran of other companies shit.

22:26That is the guy in charge now. And I just believe that Google is falling apart at the seams. Google does not know what to do anymore. And I'm really, I'm going to tailgate the October 30th earnings. I'm going to crack a beer. I'm going to listen to the call It's going to be very exciting Because I don't think it's going to be very good at all They're going to try to put lipstick on the pig They're going to try and claim that there's growth in AI And maybe I'm wrong Maybe I look like a bellend for the 800th time in my life But I don't think I am And I think we're in probably one of the most interesting Exciting and horrible eras of tech so far Where we're going to watch one of these companies collapse And collapsing might not be as neat as the whole company dies but the fracturing, the talent, the brain drain.

23:11You're watching it happen now. We've been watching it for years. And the results, well, I mean, look at Google search, look at Google's products, look at how bad they are now. And that's the thing. You think that these companies can't die. And it's probably because dying is a relative term for them. You're watching the disease work through Google as we speak. Prabagar leaving is not a good thing for the company. It's just a sign that they don't know what to do. And we're watching the fall of Rome. We really are. I'm sure of it. It might take 10 years. But it will be fascinating to watch and fascinating to tell you about.

23:46And it's been my pleasure to tell you about how much of it you can credit to Prabhagar Raghavan, the man who destroyed Google search.

24:01Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matosowski. You can check out more of his music and audio projects at matosowski.com. M-A-T-T-O-S-O-W-S-K-I.com You can email me at ez at betteroffline.com or visit betteroffline.com to find more podcast links and, of course, my newsletter. I also really recommend you go to chat.wheresyoured.at to visit the Discord and go to r slash betteroffline to check out our Reddit. Thank you so much for listening. Better Offline is a production of Cool Zone Media For more from Cool Zone Media Visit our website, coolzonemedia.com Or check us out on the iHeartRadio app Apple Podcasts, or wherever you get your podcasts