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October 25, 2024 18 mins

Last week, Prabhakar Raghavan, The Man Who Destroyed Google Search, was removed from his position at Google and made a "Chief Technologist," benching him in favor of a McKinsey-Google Lifer. In this episode, Ed ZItron walks you through how the removal of Prabhakar Raghavan shows that Google is in deep, deep trouble - and may finally be falling apart. 

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Zone Media, Hello, and welcome to Better Offline.

Speaker 2 (00:06):
I'm your host ed zetron.

Speaker 1 (00:19):
When Princess Diana died in nineteen ninety seven, Elton John
Rey wrote his famous song Candle in the Wind, changing.

Speaker 2 (00:25):
The lyrics subtly. As a tribune.

Speaker 1 (00:27):
I did the same thing for this episode about Prabagar
Ragavan 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 Prabagar Ragavan, one of Better

(00:50):
Offline's most notorious villains and the former head of Google Search,
was relieved of duty last week, becoming Google's first chief technologist.
Now it's very important to know. It's an important rule
to follow with somebody's title in silicon value that if
you can't tell what it means, it probably doesn't mean anything.

Speaker 2 (01:06):
With the notorious example.

Speaker 1 (01:08):
Of AOL Shingy their digital profit being my favorite, although
this one's a little less ridiculous. Ragavan has likely been
given a ceremonial title in the job that involves and
I quote, partnering closely with Sundharpishai 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

(01:29):
a brief rundown of who Brabagar Ragavan is or indeed was.
Back 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 is antitrust trial against
Google over their monopoly over Search. I told the tale
of how Prabagar Ragavan, then Google's head of Ads, let
a coup that began the slow descent of the world's

(01:49):
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 twenty nineteen by Google's
ads and finance teams, which had forecast a disappointing quarter. Indeed,
in response, Prabagar Ragavan pushed out Ben Gomes, then the
head of Search, and a genuine pioneer in search technology,

(02:11):
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 than the search engine results they need, you're doing
so that they can see more ads.

Speaker 2 (02:30):
It's not great.

Speaker 1 (02:31):
And though it's not clear what was done to resolve
the so called query softness that Ragavan demanded was reversed,
I hypothesized one of the moves involved rolling back changes
to search that suppress spami content. Google 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, Ragavan's deputy at Google

(02:52):
Ads at the time, specifically discussed rollbacks as a means
of increasing queries. And what's also lovely about this in
old to this in the notes, by the way, is
their response didn't really attack anything I had to say.
They just say, oh, oh, it's ridiculous what he said.
They refuse to give any true data. But I'm going
to quote the man that destroyed Google searching now to

(03:14):
kind of run this down. The March twenty nineteen core
update to Search, which happened about a week before at
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 twenty twelve that specifically targeted

(03:37):
spammy search results, as well as those hit by an
update from August first, twenty eighteen, a few months after
Ben Gomes became head of Search. Prabagar Ragavan was made
head of Search a little over a year later in
June twenty twenty, and it's pretty obvious how big a
decline Google Search has taken since then. Results are filled
with SEO garbage that search engine optimization by the way,

(03:57):
ads sponsored content that it'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 the Probagar Ragavan's reign at Google can
be seen as an illustration of much larger problems at

(04:20):
the company. Now for the next bit, please take a
look at the episode notes and go to TinyURL dot
com slash B one O two.

Speaker 2 (04:27):
Oh.

Speaker 1 (04:27):
This will be in the notes because you're gonna 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
em anyway. When Propagar Ragavan took over Search in Q
three twenty twenty, Google had just experienced its first decline

(04:48):
in year over year quarterly growth since Q four twenty twelve,
a one point sixty six percent decline in growth that
was followed by a remarkable recovery with double digit year
of a year growth just as Prabagar turned the screws
on Search to a ridiculous sixty one point five eight
percent year over year growth in Q three twenty twenty one.
Then things began to slow every quarter saw progressively lower growth,

(05:11):
reaching in the deer in Q four twenty twenty two,
when Google experienced a mere point ninety six percent year
of 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 seeing world wide. Maybe it could be something else, right,
and you'd assume, big deal, work this out right, they'll

(05:33):
recover as the wider economy did. Right.

Speaker 2 (05:37):
Not so much.

Speaker 1 (05:39):
While Google experienced the degree of recovery in its growth rates,
it took until Q three twenty twenty three to hit
double digit growth again eleven percent year every year, hitting
a high of fifteen point four one percent in Q
two twenty twenty four, before trending down again in Q
three twenty twenty four to thirteen point five nine percent.
The reason these numbers are important is that growth drives

(05:59):
everything at Google, and prabagar Ragavan drove the most consistent
growth engine in the company, Search, which grew fourteen percent
year of a year in Q one twenty twenty four,
right up until he stopped piloting it. The context is
key to understanding is 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

(06:20):
every morning. But this title is most assurdedly 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 twenty percent year over year growth,
with a few exceptions such as Q four twenty twelve,
a few months after Ragavan began at Google, where he

(06:42):
started in ads to Q three twenty thirteen, a chaotic
period where Google fell behind Amazon in shopping at revenue,
bought Motorola Mobility for twelve point five billion dollars and
by the way, that's sixty three percent more than its
trading price, and then they saw a fifteen percent year
of a year decline in pricing for their search hands.
Google's earnings also leaked early in this period, which was

(07:03):
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 seventy percent 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 study exactly when

(07:25):
Prapagar Ragavan took the wheel. The chart I'm quoting tells
another story too, though, that twisting Google Search to make
it more profitable only worked for a little bit before
growth began to slow again. Recklessness and desperation begets only
more recklessness and desperation. And you'll notice that Google's aggressive
push into Ai followed its dismal Q four twenty twenty

(07:45):
two quarter where it nearly fell into negative growth, and
when you in factor in inflation.

Speaker 2 (07:49):
It actually did.

Speaker 1 (08:01):
Now if you forgive the mixed metaphors, Google has essentially
killed its golden ghost 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
twenty twenty four to fifty billion dollars, equivalent to nearly
double its average CAPEX from twenty nineteen to twenty twenty

(08:22):
three since becoming head of Search, Ragavan has also become
the silent leader of most of Google's other revenue centers,
Google Ads, Google Shopping Maps, and eventually Gemini, Google's chet
GPT competitor, which might also explain why he's now been
pought in the naughty chair. You see, twenty twenty four
wasn't a great year for Google, and it was a

(08:43):
much worse one for prabagar Ragavan, starting in February when
Gemini their large language model generated racially diverse Nazis and,
among other things, a mess that prabagar Ragavan himself had
to apologize 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

(09:04):
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.
Ragavan 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

(09:26):
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.

Speaker 2 (09:33):
Yeah, happy, terrible, warn't them now.

Speaker 1 (09:35):
Nick Fox has to quote Google CEO Sandabashi been instrumental
in shaping Google's AI product road map, 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. I'm hypothesizing here, but I think

(09:56):
that Google is desperate, and that its earnings on October
thirtieth likely to make the.

Speaker 2 (10:00):
Street more than a little worried.

Speaker 1 (10:02):
The medium to long term prognosis is likely even worse two,
As the Wall Street Journal notes, Google's ads business is
expected to dip below a fifty percent 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 oversearch and likely ads, by the way,

(10:22):
is coming to an end. It's not an if, it's
a when it's more likely that Google sees AIS a
fundamental part of their future growth, despite the fact that
this thing only loses money and people really don't like it.
As 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 under AI research group Deep Mind,

(10:44):
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 nine fist, warning employees
a few months ago to prepare for a different market
reality because and I quote things were not like they

(11:07):
were fifteen to twenty years ago. Yeah, 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 Elius 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 the resources are going to AI or they're going

(11:28):
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 Gragavan is Nick Fox, a
man who has only worked to either McKinsey or Google.
And I am not kidding, by the way. He 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

(11:50):
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. 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

(12:12):
running Google's Assistant business, which if you google how customers
feel about it. They hate it, and 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 ten billion dollars.

(12:34):
It's ridiculous. This is the guy who's running Google's revenue.
I'm scared, well, 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.

(12:54):
Google 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 far, so hard,

(13:17):
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? How 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

(13:41):
not had a meaningful new product in over a decade,
and its most meaningful acquisition in years involved paying two
point seven billion dollars to buy Character to 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 twenty twenty or twenty twenty one. It's
unclear when that happened, and non Shazier was sudden they

(14:02):
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's copying everybody else's shit
will make them good, will save them from perdition, or

(14:22):
maybe stop the Department of Justice breaking them up, which
is I think is going to happen, albeit it might
take a while. No, Google is exactly the monster that
Sundar Pashai and Propagar Ragavan wanted it to be.

Speaker 2 (14:35):
This lumbering, ugly.

Speaker 1 (14:36):
Private equity vehicle that uses its crooked money machine to
demolish smaller players, except there are no more hyper growth
markets left 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

(14:58):
not today? Seriously, Probagar Ragavan'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

(15:19):
them in the notes, you will see that Nick Fox
was not on the side of Ben Gomes or shashy
Thakha and the people trying to save Google Search from
the rot economists. No, Nick Fox is as much. He's
just as bad as Probagar Ragavan, except he has a
worse tenure at Google. Google Assistant sucks. It's not a
great product. They're shoving AI into it. I get emails

(15:40):
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.

(16:02):
It's the guy who made the extremely unprofitable thing that
people hate, that's an also ran of other companies.

Speaker 2 (16:08):
Shit.

Speaker 1 (16:09):
That 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 tail gave the October thirtieth 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 put lipstick on the pig. They're

(16:30):
going to try and claim this growth in AI and
maybe I'm wrong. Maybe I look like a bell end
for the eight hundredth 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,

(16:52):
the brain drain, you'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. 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

(17:13):
through Google as we speak. Prabagar leaving is not a
good thing for the company. It's just the 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 ten years, but it will be fascinating
to watch and fascinating to tell you about. And it's
been my pleasure to tell you about. How much of
it you can credit to Prabagar Ragavan the man who

(17:34):
destroyed Google Search. Thank you for listening to Better Offline.
The editor and composer of the Better Offline theme song
is Matasowski. You can check out more of his music
and audio projects at Mattasowski dot com, m A. T.

(17:54):
T OsO w Ski dot com. You can email me
at easy at Better offline dot com or visit Better
Offline dot com to find more podcast links and of course,
my newsletter. I also really recommend you go to chat
dot Where's youread dot at to visit the discord, and
go to our slash Better.

Speaker 2 (18:11):
Offline to check out I'll Reddit. Thank you so much
for listening.

Speaker 3 (18:16):
Better Offline is a production of cool Zone Media. For
more from cool Zone Media, visit our website cool Zonemedia
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Ed Zitron

Ed Zitron

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