Better Offline - A Requiem for Prabhakar Raghavan

Episode Date: October 25, 2024

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.  --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/  Discord: chat.wheresyoured.at Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/zitron.bsky.social https://www.threads.net/@edzitronSee omnystudio.com/listener for privacy information.

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I'm Tom Boe. On our podcast, Inside American Soccer, you'll get the real storylines, the biggest decisions, and the truth about the U.S. national team. It wouldn't be a huge surprise if our team ends up in the quarterfinals or potentially a great run into the semifinals.

Listen, Inside American Soccer with Tom Bogart and Tab Ramos on the eye heart, radio app, Apple Podcasts, wherever you get your podcast. Cool Zone Media. Hello and welcome to Better Offline. I'm your host, Ed Zittron. When 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 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 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 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 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 profit being my favourite. 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 Sundar Pishai

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 Brabagar Ragavann 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 Justice's antitrust trial against Google over their monopoly over search, I told the tale of how Prabagar Ragavan, 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. In response, Prabagar Ragavan pushed out Ben Goams, 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 Raghavann demanded was reversed, I hypothesized one of the moves involved rolling back changes to search that suppress spammy 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, 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 refuse to give any true data. But I'm going to quote the man that destroyed Google Search now to kind of run this down. The 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. targeted spammy search results, as well as those hit by an update from August 1st, 2018, a few months after Ben Goames became head of search. Prabagar Ragavan was made head of search a little over a year later in June 2020, and it's pretty obvious how bigger decline Google Search has taken since then. Results are filled with SEO garbage, that 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 Prabagar Ragavans' 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 tiny URL.com slash B0102020. This 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 drive in your car, if you're currently prising open a window to steal a granny's purse from her car. I'll get it, I'll get him. Anyway, when Prabagar Ragavan 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% declining growth that was followed by a remarkable recovery, with double-digit year-over-year growth just as Prabagar turned the screws on search, cresting to a ridiculous 61.58% year-over-year growth in Q3, 2021. Then things began to slow. Every quarter saw progressively lower growth, reaching a nadir in 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 Geo worked 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 Q3-2020-3 to hit double-digit growth again, 11% year-over-year, hitting a high of 15.41% in Q2, 2024, before trending down again in Q3-20204 to 13.59%. The reason these numbers are important is that growth drives everything at Google, and Prabagovar Ragavan 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 assuredly 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. 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. Google'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 study exists. exactly when Prabagar Ragavan took the wheel. The chart I'm quoting tells another story, too, though. The twisting Google's search to make it more profitable only worked for a little bit before growth began to slow again. Recklessness and desperation but gets 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 went factor in inflation, it actually did. Another podcast from some SNL late-night comedy guide, not quite. Unhumor me with Robert Smygel and friends. Me and hilarious guests from Jim Gaffigan to Bob Odenkirk to David Letterman, help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel, help an a cappella band with their between songs banter. There's the worst singer in the group.

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Now, if you forgive the mixed metaphors, Google has essentially killed its golden ghost search, and now is in the process of pouring 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, 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 put in the naughty chair.

You see, 2024 wasn't a great year for Google, and it was a 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 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 Goames that making Google search more profitable was, and I quote, the new reality of their jobs, to which Ben Gooms 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's CEO Sundabeshai, been instrumental in shaping Google's AI product roadmap, which suggests that Google is going all in on artificial.

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 that Google is desperate and its earnings on October 30th 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. 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 DeepMind, a move that might be kind of smart in the handy 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, Raghavan 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. 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 Ehrlich, Eli, 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 Ragavan is Nick Fox, a man who has only worked to either McKinsey or Google, and I am not. 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 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. 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 $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.

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 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. 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 hyper-scalers. 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 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 2020 or 2021. It's unclear when that happened. And Nome 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.

Or 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 Sondar Peshai and Prabagar Ragavan 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 hypergrowth markets left were at the 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? And seriously, Prabagar Raghavans' 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 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 Thakir and the people trying to save Google search from the rot economist. No, Nick Fox is as much, he's just as bad as Prabagar 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 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 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 company shit. 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 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 bell end 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. 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, 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 run. We really are. I'm sure of it. It might take 10 years. But it'll 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 destroyed Google Search. Thank you for listening to Better Offline. The editor and composer, of the Better Offline theme song is Mattersowski. You can check out more of his music and audio projects at Mattisowski.com. M-A-T-T-T-O-S-O-S-K-I.com. You can email me at E-Z at Better Offline.com or visit Better Offline.com to find more podcast links and, of course, my newsletter.

I also really recommend you go to chat. Where's Your Ed.at to visit the Discord and go to R-S-L-L-L-L-L-L-L-L-E-L-E-R-D-E-D-D-T-T-E-T-E-T-E-E-R-D-D-E-D-D-T. Thank you so much for listening. 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 podcast.

Another podcast from some SNL, late-night comedy guy, not quite. Unhumor me with Robert Smygel and friends. Me and hilarious guests from Bob Odenkirk to David Letterman help make you funnier. This week, my guest, SNL's Mikey Day and head writer Streeter Seidel help an Acapella band with their Between Songs

banter. Where does your group perform? We do some retirement homes. Those people are starving for banter. Listen to humor me with Robert Smigel and friends on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Life is full of hurdles. So how do you keep going? On Hurtle with Emily Abadi, we're talking with the most inspiring women in sports and wellness from professional athletes, coaches, and Olympic champions about the challenges that shape them and the mindset that keeps them moving forward. At our level, at this scale, being able to fail, in front of the entire world. Like, I can do anything.

I can do anything. Listen to Hurtle with Emily Abadi on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. Presented by Capital One, founding partner of IHeart Women's Sports. Hey, I'm Deanna Maria Riva, and on my new podcast, How Hard Can It Be?

I call on my Gen X squad from Ohio to Hollywood as we navigate Midlife's most fantastic BS. Unfiltered conversations from night sweats to futas to scheduling sex. Wait, what sex? Is it just, me or does every woman my age want to look at Pinterest instead of having sex sometimes? They say we can't polish a turn, but we're sure going to try. So let's get blunt with laughs,

tears, or tears of laughter. Listen to How Hard Can It Be with Diana Maria Riva on the IHeart Radio app, Apple Podcasts, or wherever you get your podcasts. American soccer is about to explode. The World Cup is coming. Raymore sending on to Ernie Stewart. The chip! Score! I'm Tab Ramos. I'm Tom Boca. On our podcast, Inside American Soccer,

you'll get the real storylines, the biggest decisions, and the truth about the U.S. national team. It wouldn't be a huge surprise if our team ends up in the quarterfinals or potentially a great run into the semifinals. Listen, Inside American Soccer with Tom Bogart and Tab Ramos

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