Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: It's twenty twenty one and some employees on Google's web
Speaker 2: search team go to their leadership with an.
Speaker 1: Idea having a chatbot that could answer some of user's
Speaker 1: questions directly alongside the links.
Speaker 2: Julia Love is a tech reporter at Bloomberg who covers Google,
Speaker 2: and so was Davey Alba.
Speaker 3: This was several months before the launch of the massively
Speaker 3: popular chat GPT in late twenty twenty two. So Google
Speaker 3: Search was raking in billions of dollars for Alphabet the
Speaker 3: parent company, and engineers and leadership just didn't want to
Speaker 3: mess with that money making machine.
Speaker 2: So when this group of employees present this proposal to
Speaker 2: use artificial intelligence to answer some of users search queries directly,
Speaker 2: leadership shoots them down.
Speaker 1: It was so tech at that time to think about
Speaker 1: disrupting the way doodle search worked.
Speaker 3: Generative AI just hadn't had its moment yet.
Speaker 2: The next year, open ai rolled out chat GPT, and
Speaker 2: all of a sudden, Google faced a reckoning. It can
Speaker 2: no longer just embrace the status quo. It has to
Speaker 2: adapt well. Three years later, Julia and Davey set out
Speaker 2: to assess how Google's belated attempt to infuse their core
Speaker 2: product with generative AI is going.
Speaker 1: We spoke with a lot of former employees who had
Speaker 1: worked on the product and moved on. Doodle also granted
Speaker 1: us considerable access, and then we also fanned out and
Speaker 1: talked to the publishers and creators who really live and
Speaker 1: die by Doodle's business practices.
Speaker 3: We had had this creeping sense over the past few
Speaker 3: months and maybe even a year plus at this point,
Speaker 3: that Google Search had been changing. There's been a lot
Speaker 3: of inks build over this idea that it has been
Speaker 3: changing for the worse, that Google Search is getting quite
Speaker 3: bad in quality.
Speaker 2: The story that emerged is a window into how incorporating
Speaker 2: generative AI into Google Search has become an existential issue,
Speaker 2: both for Alphabet employees and for the websites the company's
Speaker 2: business is based on. I'm David Gera, and this is
Speaker 2: the big take from Bloomberg News today on the show
Speaker 2: Inside the Changing World of Google Search, with reporters who
Speaker 2: have gotten a first hand look at the way that
Speaker 2: plain white search page has been reworked, and from a
Speaker 2: web creator whose livelihood is threatened by it. Just think
Speaker 2: about what it would have been like to be one
Speaker 2: of those team leaders at Google back in twenty twenty one.
Speaker 2: Maybe you'll sympathize with how little interest there'd be in
Speaker 2: mucking up Google's clean, reliable search interface with new AI elements.
Speaker 2: After all, search made Google nearly two two hundred billion
Speaker 2: dollars in twenty twenty four. That's around sixty percent of
Speaker 2: Alphabet's total revenue, and it keeps a lot of people employed.
Speaker 1: There are thousands of people who keep Google Search humming smoothly.
Speaker 1: The codebase is massive, and it's kind of a creaky
Speaker 1: machine in some ways. It's been around since the late nineties,
Speaker 1: and there are some relatives of that time, code written
Speaker 1: by Marissa Meyer, who went on to.
Speaker 4: Become the CEO of Yahoo.
Speaker 1: And I think that there's so much attention devoted to
Speaker 1: keeping those results delivered.
Speaker 2: Quickly, that instant response Google spits out when you enter
Speaker 2: a search query. It's central to the product's appeal, which
Speaker 2: made it a challenge to add any kind of feature
Speaker 2: to search.
Speaker 1: They know they rest losing users with any small increase
Speaker 1: in the time it takes the page to load.
Speaker 2: User had started to complain that Google Search was getting worse.
Speaker 2: It was being cluttered with bot created junk sites built
Speaker 2: to maximize clicks that degraded the quality of Google Search results,
Speaker 2: and it alienated users.
Speaker 3: The example I would always go to is when you
Speaker 3: land on a recipe site and there's this long prelude
Speaker 3: ahead of the actual recipe and the food bloggers life story.
Speaker 3: So that's one quite illustrative example of what web creators
Speaker 3: were starting to do, which was create websites that were
Speaker 3: written for Google Search and sort of catered to Google's algorithms,
Speaker 3: and that started to change the way the Internet look
Speaker 3: end made it also in some ways a difficult problem
Speaker 3: for Google to rank high quality websites high up in
Speaker 3: its results.
Speaker 2: Google employees were aware of this problem, and then open
Speaker 2: Ai launched chat GPT. How did that verberate around Google
Speaker 2: alphabet more and more broadly, how did they react to
Speaker 2: the debut of that platform.
Speaker 3: They reacted with a lot of panic. They declared a
Speaker 3: code read, which means all hands on deck, and within
Speaker 3: the Search Org, they transferred something like a thousand engineers,
Speaker 3: which is a sizeable proportion of the engineers that work
Speaker 3: within that division, and set them loose on this project
Speaker 3: of coming up with an answer to chat GBT. So
Speaker 3: how do you make search more integrated with generative AI technology.
Speaker 1: It was just this very, you know, all hands on
Speaker 1: deck situation.
Speaker 2: It's not as if Google hadn't worked with AI before.
Speaker 2: They'd been using the technology under the hood to make
Speaker 2: results better for years. But incorporating generative AI right into
Speaker 2: its flagship products, including search, overnight Google went from feeling
Speaker 2: cautious about it to doubleing down.
Speaker 1: I think that the response that we saw was in
Speaker 1: some ways akin to Doodle's response to social media. Everyone
Speaker 1: at Doodle had to have a social component to their product.
Speaker 1: That was a mandate. Bonuses were tied to that, and
Speaker 1: we heard that after chat GPT every product had to
Speaker 1: have a generative AI feature. But I think the states
Speaker 1: were higher. It just felt much more existential than even
Speaker 1: social media did.
Speaker 4: Because if AI.
Speaker 1: Can answer users questions directly, then who needs the list
Speaker 1: of links?
Speaker 4: Who needs Doodle?
Speaker 2: This sudden pivot wasn't easy. Google had built its product
Speaker 2: as an information aggregator, directing users to other sites who
Speaker 2: themselves provided information. Providing information directly came with new risks.
Speaker 1: One former employee told us that Doodle is kind of
Speaker 1: weighed down by this notion of Doodle speaks the truth.
Speaker 4: That's how the public often sees it.
Speaker 1: And so when chat GPT launched, it was a fun novelty.
Speaker 1: It was something new, but if it occasionally hallucinated, that
Speaker 1: was something people were kind of willing to accept as
Speaker 1: part of the compact with using cutting edge technology. And
Speaker 1: for doodle Search to be offering up that type of experience,
Speaker 1: I think the public expectation is just very different, and executives.
Speaker 4: Were very aware of that.
Speaker 2: Fully aware of the stakes, Google charged forward and a
Speaker 2: few months later it started beta testing a new feature,
Speaker 2: AI Overviews.
Speaker 3: It was quite a move. It was really Google signaling
Speaker 3: that they were no longer so paranoid and afraid about
Speaker 3: making mistakes as generative AI is wont to do, and
Speaker 3: that they were willing to sort of play with search.
Speaker 3: And I think the huge advantage that Google has had
Speaker 3: is that they already have these products and services that
Speaker 3: have been in use among the general population, and you know,
Speaker 3: whether or not the public was necessarily asking for generative
Speaker 3: AI to be embedded in those tools, Google sort of
Speaker 3: made that decision for people and rolled these features out anyway.
Speaker 2: In other words, Google's response to chat GPT has been
Speaker 2: to roll the dice on AI next up, how that
Speaker 2: gamble has worked out for Google and for the web
Speaker 2: creators who rely on those all important search results. That's
Speaker 2: after the break. Liz Reid overseas Google's push into the
Speaker 2: wild West of AI.
Speaker 1: Liz Reid is a really interesting figure within the company.
Speaker 1: She's been with the company since two thousand and three,
Speaker 1: when she was fresh out of college. She spent most
Speaker 1: of her time in maps. She told us a story
Speaker 1: about Sarah de Brin and how he was just really
Speaker 1: urging the team like to launch as soon as possible,
Speaker 1: and Liz said that that was the right call, that
Speaker 1: it made sense to get user feedback as early as possible,
Speaker 1: even if all the kings hadn't been ironed out. And
Speaker 1: I think that that's a philosophy that we really saw
Speaker 1: her apply.
Speaker 2: Former employees told Julia and Davy that the search team
Speaker 2: under Reid seems to have found a new lease on life.
Speaker 1: It does seem like there is renewed vigor and energy
Speaker 1: in the organization. It had been through kind of a
Speaker 1: long period of slumber, but now people I think are
Speaker 1: really motivated. They have a target to catch up to,
Speaker 1: and they have been rolling out products much faster. Ster
Speaker 1: soundar Pichai has boasted in the earnings calls about how
Speaker 1: they have really succeeded in driving down the cost of
Speaker 1: serving up these AI answers, which is always the strength
Speaker 1: of Google's scale and efficiency.
Speaker 2: But that growth in the AI accompaniment to search has
Speaker 2: come with some notable hiccups. It's generated a lot of
Speaker 2: errors and continues to do so to this day. That's
Speaker 2: a big issue for users, but perhaps the biggest issue
Speaker 2: has to do with important collaborators the websites it directs
Speaker 2: users to through search websites like Housefresh, which Giselle Navarro runs.
Speaker 5: What we have been told by Google is that the
Speaker 5: search results have changed, and that whatever we were receiving
Speaker 5: in traffic five thousand and seven thousand people come to
Speaker 5: a site every day from Google that's not going to
Speaker 5: come back because the search results have changed.
Speaker 2: House Fresh publishes detailed reviews of air purified. The site
Speaker 2: depends on the revenue it gets when users buy the
Speaker 2: products it's reviewed, and it relies on Google to get
Speaker 2: users on its page in the first place. Giselle and
Speaker 2: her colleagues complained on social media and wrote articles about
Speaker 2: the way the AI search component was affecting their business.
Speaker 2: It caught Google's attention, and she was invited to attend
Speaker 2: a web creator conversation event at Google's Mountain View headquarters
Speaker 2: last fall.
Speaker 4: At the beginning, we were all very angry.
Speaker 5: At the morning sessions were very upsetting because I think
Speaker 5: we were just hearing again and again, it's not us
Speaker 5: me kind of thing. It's not you like, your websites
Speaker 5: are great, keep doing what you're doing, and we're like,
Speaker 5: you know that what we do cost money. We can't
Speaker 5: just keep doing it in the hopes that you're going
Speaker 5: to get it right.
Speaker 2: Navarro says it felt like Google's engineers had been told
Speaker 2: to respond to any ideas the web creators offered by
Speaker 2: shooting them down, as did they progress.
Speaker 5: I think lots of the creators in the room checked
Speaker 5: out us, this is a this is just a part exercise.
Speaker 2: Julia and Davey spoke with many web creators in their reporting,
Speaker 2: and they found that Navarro's experience isn't unique.
Speaker 3: And most of these websites simply haven't recovered. Some of
Speaker 3: the site owners that we spoke to have gone out
Speaker 3: of business and stopped publishing, and you know, sort of
Speaker 3: the only thing that has changed on Google's side of
Speaker 3: the equation is their increased focus on AI and generative AI.
Speaker 3: They really feel like the unspoken compact between them and
Speaker 3: Google has failed in a lot of ways, and that
Speaker 3: they can't rely on Google to be a reliable source
Speaker 3: of traffic anymore.
Speaker 2: Apps like Chat GPT haven't had a meaningful impact on
Speaker 2: Google's market share yet.
Speaker 1: But analysts tell us they are beginning to see some
Speaker 1: signs that chat, GPT and other products are starting to
Speaker 1: have an effect.
Speaker 2: Analysts are forecasting Google's search REVS new growth will slow down.
Speaker 2: After all, for a company that was built on web
Speaker 2: search and for whom search remains the most lucrative part
Speaker 2: of its business, the changes wrought by AI are raising
Speaker 2: all sorts of existential questions.
Speaker 3: We ask the question of executives, what does it mean
Speaker 3: to Google anymore when you say, oh, just google that
Speaker 3: or let me google that for you. Everyone knows what
Speaker 3: that means. But in this sort of age of generative AI,
Speaker 3: I think Google is thinking about that verb in a
Speaker 3: different way.
Speaker 2: Even In other words, Google may have signed up to
Speaker 2: explore the AI universe, but it hasn't yet figured out
Speaker 2: what its role is in the expedition.
Speaker 3: One thing that is undeniable that's come out of our
Speaker 3: reporting is that Google, for better worse, shapes the open
Speaker 3: Web as we know it, and it also reflects.
Speaker 4: The open Web.
Speaker 3: And so we are kind of in this cycle where
Speaker 3: creators of the Web are disincentivized to create, you know,
Speaker 3: sort of human written content to put out on the
Speaker 3: Internet that Google would then point traffic to. They're really
Speaker 3: contending with like a flood of AI slop that is
Speaker 3: invading the Openweb. And you know, Google's AI also trains
Speaker 3: on material that is out there, including this AI generated content.
Speaker 3: And so I think we're kind of in this cycle
Speaker 3: right now where the Web is slowly degrading.
Speaker 2: Google was one of the pioneers in making the Web
Speaker 2: an integrated part of modern human existence. It's challenge now
Speaker 2: appears to be how to embrace this new phase of
Speaker 2: intelligence without deleting the humanity that made it possible in
Speaker 2: the first place. For more on Google's foray into AI,
Speaker 2: check out BusinessWeek's cover story searching for a New Google
Speaker 2: on the Bloomberg terminal Bloomberg dot com, or in the
Speaker 2: April twenty twenty five issue of Bloomberg BusinessWeek. This is
Speaker 2: the big take from Bloomberg News. I'm David Gura. This
Speaker 2: episode is produced by Julia Press. It was edited by
Speaker 2: Patty Hirsch and Joshua Brustein. It was fact checked by
Speaker 2: Agrana Tapia and mixed and sound designed by Alex Kura.
Speaker 2: Our senior producer is Naomi Shaven. Our senior editor is
Speaker 2: Elizabeth Ponso. Our executive producer is Nicole beemster borg Sage
Speaker 2: Bauman is Bloomberg's head of podcasts. If you like this episode,
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Speaker 2: Thanks for listening. We'll be back tomorrow