Speaker 1: Zone Media, Hello, and welcome to Better Offline.
Speaker 2: I'm your host ed zetron.
Speaker 1: When Princess Diana died in nineteen ninety seven, Elton John
Speaker 1: Rey wrote his famous song Candle in the Wind, changing.
Speaker 2: The lyrics subtly. As a tribune.
Speaker 1: I did the same thing for this episode about Prabagar
Speaker 1: Ragavan of Google. However, when I told cool Zone Media
Speaker 1: about my plans, Robert Evans threatened me with and I quote,
Speaker 1: a trip to the Carnival prison and then sent me
Speaker 1: a low quality jpeg of a gun. As a result,
Speaker 1: I will be neglecting to release Candle in the Toilet
Speaker 1: for the time being. Nevertheless, it's both my duty and
Speaker 1: my pleasure to reveal that Prabagar Ragavan, one of Better
Speaker 1: Offline's most notorious villains and the former head of Google Search,
Speaker 1: was relieved of duty last week, becoming Google's first chief technologist.
Speaker 1: Now it's very important to know. It's an important rule
Speaker 1: to follow with somebody's title in silicon value that if
Speaker 1: you can't tell what it means, it probably doesn't mean anything.
Speaker 2: With the notorious example.
Speaker 1: Of AOL Shingy their digital profit being my favorite, although
Speaker 1: this one's a little less ridiculous. Ragavan has likely been
Speaker 1: given a ceremonial title in the job that involves and
Speaker 1: I quote, partnering closely with Sundharpishai and providing technical direction,
Speaker 1: you know, as opposed to actually leading it. If you're confused, forgetful,
Speaker 1: or just love hearing me speak, let me give you
Speaker 1: a brief rundown of who Brabagar Ragavan is or indeed was.
Speaker 1: Back in April, I ran probably my most well known episode,
Speaker 1: the Man that destroyed Google Search using emails, revealed as
Speaker 1: part of the Department of Justice is antitrust trial against
Speaker 1: Google over their monopoly over Search. I told the tale
Speaker 1: of how Prabagar Ragavan, then Google's head of Ads, let
Speaker 1: a coup that began the slow descent of the world's
Speaker 1: most important website towards its kind of broken, half working,
Speaker 1: shitty thing that you see today and have for the
Speaker 1: last few years. The key event in the podcast was
Speaker 1: a code yellow crisis declared in twenty nineteen by Google's
Speaker 1: ads and finance teams, which had forecast a disappointing quarter. Indeed,
Speaker 1: in response, Prabagar Ragavan pushed out Ben Gomes, then the
Speaker 1: head of Search, and a genuine pioneer in search technology,
Speaker 1: by the way, he'd been there forever, and he pushed
Speaker 1: him to increase the number of queries people made by
Speaker 1: any means necessary. Now you may think queries on Google
Speaker 1: is that such a bad thing. Well, when you're optimizing
Speaker 1: a search engine to make people search more rather than
Speaker 1: getting than the search engine results they need, you're doing
Speaker 1: so that they can see more ads.
Speaker 2: It's not great.
Speaker 1: And though it's not clear what was done to resolve
Speaker 1: the so called query softness that Ragavan demanded was reversed,
Speaker 1: I hypothesized one of the moves involved rolling back changes
Speaker 1: to search that suppress spami content. Google has since denied
Speaker 1: this in a response to my newsletter, despite the fact
Speaker 1: that emails revealed as part of the same Department of
Speaker 1: Justice trial, revealed that Jerry Dishler, Ragavan's deputy at Google
Speaker 1: Ads at the time, specifically discussed rollbacks as a means
Speaker 1: of increasing queries. And what's also lovely about this in
Speaker 1: old to this in the notes, by the way, is
Speaker 1: their response didn't really attack anything I had to say.
Speaker 1: They just say, oh, oh, it's ridiculous what he said.
Speaker 1: They refuse to give any true data. But I'm going
Speaker 1: to quote the man that destroyed Google searching now to
Speaker 1: kind of run this down. The March twenty nineteen core
Speaker 1: update to Search, which happened about a week before at
Speaker 1: the end of the code Yellow, was expected to be
Speaker 1: and I quote, one of the largest updates to Search
Speaker 1: in a very long time. Yet when it launched, many
Speaker 1: found that the update mostly rolled back changes and traffic
Speaker 1: was increasing to sites that had previously been suppressed by
Speaker 1: Google Search's Penguin update from twenty twelve that specifically targeted
Speaker 1: spammy search results, as well as those hit by an
Speaker 1: update from August first, twenty eighteen, a few months after
Speaker 1: Ben Gomes became head of Search. Prabagar Ragavan was made
Speaker 1: head of Search a little over a year later in
Speaker 1: June twenty twenty, and it's pretty obvious how big a
Speaker 1: decline Google Search has taken since then. Results are filled
Speaker 1: with SEO garbage that search engine optimization by the way,
Speaker 1: ads sponsored content that it's pretty much impossible to tell
Speaker 1: from regular results, and the disastrous launch of Google's AI
Speaker 1: powered summaries, which produced results that range from hilarious like
Speaker 1: telling you to eat rocks or life threatening like telling
Speaker 1: you a mushroom is safe. To eat that will kill you.
Speaker 1: And I think the Probagar Ragavan's reign at Google can
Speaker 1: be seen as an illustration of much larger problems at
Speaker 1: the company. Now for the next bit, please take a
Speaker 1: look at the episode notes and go to TinyURL dot
Speaker 1: com slash B one O two.
Speaker 2: Oh.
Speaker 1: This will be in the notes because you're gonna want
Speaker 1: to look at the chart I'm referencing. But I'm really
Speaker 1: going to try my hardest to get the most of
Speaker 1: it out verbally as well. If you're driving your car,
Speaker 1: if you're currently prizing open a window to steal a
Speaker 1: granny's purse from her car, I'll get it. I'll get
Speaker 1: em anyway. When Propagar Ragavan took over Search in Q
Speaker 1: three twenty twenty, Google had just experienced its first decline
Speaker 1: in year over year quarterly growth since Q four twenty twelve,
Speaker 1: a one point sixty six percent decline in growth that
Speaker 1: was followed by a remarkable recovery with double digit year
Speaker 1: of a year growth just as Prabagar turned the screws
Speaker 1: on Search to a ridiculous sixty one point five eight
Speaker 1: percent year over year growth in Q three twenty twenty one.
Speaker 1: Then things began to slow every quarter saw progressively lower growth,
Speaker 1: reaching in the deer in Q four twenty twenty two,
Speaker 1: when Google experienced a mere point ninety six percent year
Speaker 1: of year growth, something that one might be able to
Speaker 1: blame on the end of the opulent post vaccine spending
Speaker 1: we saw across the entire economy, or the spiraling rates
Speaker 1: of inflation seeing world wide. Maybe it could be something else, right,
Speaker 1: and you'd assume, big deal, work this out right, they'll
Speaker 1: recover as the wider economy did. Right.
Speaker 2: Not so much.
Speaker 1: While Google experienced the degree of recovery in its growth rates,
Speaker 1: it took until Q three twenty twenty three to hit
Speaker 1: double digit growth again eleven percent year every year, hitting
Speaker 1: a high of fifteen point four one percent in Q
Speaker 1: two twenty twenty four, before trending down again in Q
Speaker 1: three twenty twenty four to thirteen point five nine percent.
Speaker 1: The reason these numbers are important is that growth drives
Speaker 1: everything at Google, and prabagar Ragavan drove the most consistent
Speaker 1: growth engine in the company, Search, which grew fourteen percent
Speaker 1: year of a year in Q one twenty twenty four,
Speaker 1: right up until he stopped piloting it. The context is
Speaker 1: key to understanding is I don't know if you call
Speaker 1: it a promotion, a demotion, or just a room with
Speaker 1: no door handle on it which they put him in
Speaker 1: every morning. But this title is most assurdedly not a
Speaker 1: chief technology officer or any kind of officer or executive
Speaker 1: at all. Google has, for the most part, enjoyed one
Speaker 1: of the most incredible runs in business history, with almost
Speaker 1: an entire decade of twenty percent year over year growth,
Speaker 1: with a few exceptions such as Q four twenty twelve,
Speaker 1: a few months after Ragavan began at Google, where he
Speaker 1: started in ads to Q three twenty thirteen, a chaotic
Speaker 1: period where Google fell behind Amazon in shopping at revenue,
Speaker 1: bought Motorola Mobility for twelve point five billion dollars and
Speaker 1: by the way, that's sixty three percent more than its
Speaker 1: trading price, and then they saw a fifteen percent year
Speaker 1: of a year decline in pricing for their search hands.
Speaker 1: Google's earnings also leaked early in this period, which was
Speaker 1: not a lot of fun for Google at all. But
Speaker 1: growth is slowing again and it isn't showing any signs
Speaker 1: of returning to the heady days where seventy percent year
Speaker 1: over year growth each quarter was considered bad Google has
Speaker 1: deliberately made its products worse as a means of increasing
Speaker 1: revenue and increasing growth, spawning a trend of both remarkable
Speaker 1: revenue growth and worsening search results. That study exactly when
Speaker 1: Prapagar Ragavan took the wheel. The chart I'm quoting tells
Speaker 1: another story too, though, that twisting Google Search to make
Speaker 1: it more profitable only worked for a little bit before
Speaker 1: growth began to slow again. Recklessness and desperation begets only
Speaker 1: more recklessness and desperation. And you'll notice that Google's aggressive
Speaker 1: push into Ai followed its dismal Q four twenty twenty
Speaker 1: two quarter where it nearly fell into negative growth, and
Speaker 1: when you in factor in inflation.
Speaker 2: It actually did.
Speaker 1: Now if you forgive the mixed metaphors, Google has essentially
Speaker 1: killed its golden ghost Search and now is in the
Speaker 1: process of pawning its eggs to buy decidedly non magical
Speaker 1: beans in this case, I mean data centers and GPUs.
Speaker 1: With Google increasing its capital expenditures in the financial year
Speaker 1: twenty twenty four to fifty billion dollars, equivalent to nearly
Speaker 1: double its average CAPEX from twenty nineteen to twenty twenty
Speaker 1: three since becoming head of Search, Ragavan has also become
Speaker 1: the silent leader of most of Google's other revenue centers,
Speaker 1: Google Ads, Google Shopping Maps, and eventually Gemini, Google's chet
Speaker 1: GPT competitor, which might also explain why he's now been
Speaker 1: pought in the naughty chair. You see, twenty twenty four
Speaker 1: wasn't a great year for Google, and it was a
Speaker 1: much worse one for prabagar Ragavan, starting in February when
Speaker 1: Gemini their large language model generated racially diverse Nazis and,
Speaker 1: among other things, a mess that prabagar Ragavan himself had
Speaker 1: to apologize for. This man never pokes his head up,
Speaker 1: but he had to in February. A few months later,
Speaker 1: Google introduced AI powered search summaries that told users to
Speaker 1: eat rocks and put glue on pizza, which only caused
Speaker 1: people to remember exactly how bad Google Search had got
Speaker 1: and laugh at how the only way that Google seemed
Speaker 1: to be able to innovate was to make it worse.
Speaker 1: Ragavan is being replaced by Nick Fox, a former McKinsey
Speaker 1: guy who, in the emails I called attention to in
Speaker 1: the podcast I've been talking about, told Ben Gomes that
Speaker 1: making Google Search more profitable was and I quote the
Speaker 1: new reality of their jobs, to which Ben Gomes responded
Speaker 1: by saying that he was concerned that growth was all
Speaker 1: that Google was thinking about.
Speaker 2: Yeah, happy, terrible, warn't them now.
Speaker 1: Nick Fox has to quote Google CEO Sandabashi been instrumental
Speaker 1: in shaping Google's AI product road map, which suggests that
Speaker 1: Google is going all in on artificial intelligence at a
Speaker 1: time when developers are struggling to justify using its models
Speaker 1: and are actively mad at both the way in which
Speaker 1: it markets them and the way in which they're integrated
Speaker 1: into Google's other products. I'm hypothesizing here, but I think
Speaker 1: that Google is desperate, and that its earnings on October
Speaker 1: thirtieth likely to make the.
Speaker 2: Street more than a little worried.
Speaker 1: The medium to long term prognosis is likely even worse two,
Speaker 1: As the Wall Street Journal notes, Google's ads business is
Speaker 1: expected to dip below a fifty percent market share in
Speaker 1: the US in the next year for the first time
Speaker 1: in more than a decade, which, by the way, was
Speaker 1: right around where things were kind of bad for them,
Speaker 1: and Google's gratuitous monopoly oversearch and likely ads, by the way,
Speaker 1: is coming to an end. It's not an if, it's
Speaker 1: a when it's more likely that Google sees AIS a
Speaker 1: fundamental part of their future growth, despite the fact that
Speaker 1: this thing only loses money and people really don't like it.
Speaker 1: As part of the Ragavan reorganization, Google is also moving
Speaker 1: the Gemini app team, the one handling the chat GPT
Speaker 1: competitor I've been talking about under AI research group Deep Mind,
Speaker 1: a move that might be kind of smart in the
Speaker 1: hand the AI to the AI people kind of way,
Speaker 1: but also suggests that there's just this degree of disarray
Speaker 1: at the company, and I don't think that's getting better
Speaker 1: in a hurry. You see, Ragavan was powerful and for
Speaker 1: a time successful. He ruled with nine fist, warning employees
Speaker 1: a few months ago to prepare for a different market
Speaker 1: reality because and I quote things were not like they
Speaker 1: were fifteen to twenty years ago. Yeah, back when he
Speaker 1: worked at Yahoo. And he then would proceed to say
Speaker 1: that he was shortening the amount of time that his
Speaker 1: reports would have to work on certain projects, according to
Speaker 1: Jennifer Elius of CNBC, which is exactly the kind of
Speaker 1: move you make when things are going poorly. This also
Speaker 1: kind of reflects things that I've heard from internal Googlers,
Speaker 1: whether the resources are going to AI or they're going
Speaker 1: nowhere else. The same deal with Microsoft. We're in a
Speaker 1: group delusion, folks. It's not brilliant. But let's get back
Speaker 1: to the other fella. Replacing Gragavan is Nick Fox, a
Speaker 1: man who has only worked to either McKinsey or Google.
Speaker 1: And I am not kidding, by the way. He was
Speaker 1: at McKinsey for a few years then has been at
Speaker 1: Google ever since. It's completely bonkers. And I mean, this
Speaker 1: is the kind of move you make putting a guy
Speaker 1: like Nick Fox on top. It's something you do because
Speaker 1: you don't know what to do, and somebody needed to
Speaker 1: get fired or moved into the naughty box. Something had
Speaker 1: to change, and well it was. And what's crazy is
Speaker 1: that you think they'd find a guy with a history
Speaker 1: of success with a product that people love, that's doing
Speaker 1: really well, that's making a bunch of money, right, Well,
Speaker 1: you'd be wrong because Nick Fox is most famous for
Speaker 1: running Google's Assistant business, which if you google how customers
Speaker 1: feel about it. They hate it, and it's really just
Speaker 1: famous for kind of sucking and literally making them no money.
Speaker 1: Google Assistant is a loss loss, lossy, lossy product. It
Speaker 1: loses so much money, like a bunch of other assistant companies.
Speaker 1: Look at Amazon Alexa losing them over ten billion dollars.
Speaker 1: It's ridiculous. This is the guy who's running Google's revenue.
Speaker 1: I'm scared, well, not scared. It would be kind of
Speaker 1: funny if Google started collapsing. I'd enjoy watching. Or I
Speaker 1: don't know, they could make themselves better. Who knows. Anyway,
Speaker 1: I'd argue there's a compelling case that can be made
Speaker 1: that we're watching the slow, painful collapse of this company.
Speaker 1: Google was at one point known for making these transformational,
Speaker 1: beloved products, and then they chose to put people in
Speaker 1: power to make them worse, to make them more money.
Speaker 1: And maybe what we're watching here is kind of the
Speaker 1: net result of the rot economy. When a rot economist
Speaker 1: is given the wheel, you get these early pops when
Speaker 1: things are going well. Number go up, so far, so hard,
Speaker 1: number so good, so big. We love number. But the
Speaker 1: problem is, if you're just destroying the products, if you're
Speaker 1: squeezing your customers, if you're invading their lives more as
Speaker 1: a means of making this money, what do you fall
Speaker 1: back on when growth goes away? How do you inspire
Speaker 1: your customers when things suck ass. The answer is you don't.
Speaker 1: And just like the rest of the hyperscalers, Google has
Speaker 1: not had a meaningful new product in over a decade,
Speaker 1: and its most meaningful acquisition in years involved paying two
Speaker 1: point seven billion dollars to buy Character to Ai to
Speaker 1: hire back a guy who quit because he was mad
Speaker 1: that Google wouldn't release an early version of a large
Speaker 1: language model in twenty twenty or twenty twenty one. It's
Speaker 1: unclear when that happened, and non Shazier was sudden they
Speaker 1: shouldn't have let go, But at the same time, it's like,
Speaker 1: is this guy really going to turn things around? Seriously,
Speaker 1: Google is just a company bereft of vision, and they're
Speaker 1: incapable of making money without their monopolies, and they're just
Speaker 1: flailing wildly in the hopes that's copying everybody else's shit
Speaker 1: will make them good, will save them from perdition, or
Speaker 1: maybe stop the Department of Justice breaking them up, which
Speaker 1: is I think is going to happen, albeit it might
Speaker 1: take a while. No, Google is exactly the monster that
Speaker 1: Sundar Pashai and Propagar Ragavan wanted it to be.
Speaker 2: This lumbering, ugly.
Speaker 1: Private equity vehicle that uses its crooked money machine to
Speaker 1: demolish smaller players, except there are no more hyper growth
Speaker 1: markets left to throw the billions at, and now they're
Speaker 1: left with generative AI, a technology that lacks any mass
Speaker 1: market utility and burns cash with every single prompt. I
Speaker 1: know it's a bit dramatic to suggest that we're watching
Speaker 1: Google die, but I've done it with Facebook, so why
Speaker 1: not today? Seriously, Probagar Ragavan's time at Google coming to
Speaker 1: an end is a sign that they've realized that something
Speaker 1: is broken, that they know something has to change. But
Speaker 1: it also is a sign that this company doesn't know
Speaker 1: what has to change because they put a fucking McKinsey
Speaker 1: guy at the top. And yes, I know he's more
Speaker 1: a Google guy than a McKinsey guy. But if you
Speaker 1: look back at the emails, and I will link to
Speaker 1: them in the notes, you will see that Nick Fox
Speaker 1: was not on the side of Ben Gomes or shashy
Speaker 1: Thakha and the people trying to save Google Search from
Speaker 1: the rot economists. No, Nick Fox is as much. He's
Speaker 1: just as bad as Probagar Ragavan, except he has a
Speaker 1: worse tenure at Google. Google Assistant sucks. It's not a
Speaker 1: great product. They're shoving AI into it. I get emails
Speaker 1: every week from someone saying, can you do a thing
Speaker 1: on Google Assistant. I don't want to, because all I'd
Speaker 1: be saying for half an hour is Google Assistant is crap.
Speaker 1: Google Assistant is getting worse. Everyone's mad at Google Assistant.
Speaker 1: Why is Google Assistant so bad? And the well, I
Speaker 1: actually don't have an answer for that. But I do
Speaker 1: have an answer for who's running all of Google's stuff now,
Speaker 1: who's running Google Search and a bunch of other things.
Speaker 1: It's the guy who made the extremely unprofitable thing that
Speaker 1: people hate, that's an also ran of other companies.
Speaker 2: Shit.
Speaker 1: That is the guy in charge now. And I just
Speaker 1: believe that Google is falling apart at the seams. Google
Speaker 1: does not know what to do anymore. And I'm really
Speaker 1: I'm going to tail gave the October thirtieth earnings. I'm
Speaker 1: going to crack a beer. I'm going to listen to
Speaker 1: the call. It's going to be very exciting because I
Speaker 1: don't think it's going to be very good at all.
Speaker 1: They're going to try put lipstick on the pig. They're
Speaker 1: going to try and claim this growth in AI and
Speaker 1: maybe I'm wrong. Maybe I look like a bell end
Speaker 1: for the eight hundredth time in my life, but I
Speaker 1: don't think I am, and I think we're in probably
Speaker 1: one of the most interesting, exciting and horrible eras of
Speaker 1: tech so far, where we're going to watch one of
Speaker 1: these companies collapse. And collapsing might not be as neat
Speaker 1: as the whole company dies, but the fracturing, the talent,
Speaker 1: the brain drain, you're watching it happen now. We've been
Speaker 1: watching it for years. And the results well, I mean,
Speaker 1: look at Google Search, look at Google's products. How bad
Speaker 1: they are now? And that's the thing. You think that
Speaker 1: these companies can't die, And it's probably because dying is
Speaker 1: a relative term for them. You're watching the disease work
Speaker 1: through Google as we speak. Prabagar leaving is not a
Speaker 1: good thing for the company. It's just the sign that
Speaker 1: they don't know what to do. And we're watching the
Speaker 1: fall of Rome. We really are, I'm sure of it.
Speaker 1: It might take ten years, but it will be fascinating
Speaker 1: to watch and fascinating to tell you about. And it's
Speaker 1: been my pleasure to tell you about. How much of
Speaker 1: it you can credit to Prabagar Ragavan the man who
Speaker 1: destroyed Google Search. Thank you for listening to Better Offline.
Speaker 1: The editor and composer of the Better Offline theme song
Speaker 1: is Matasowski. You can check out more of his music
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Speaker 2: Offline to check out I'll Reddit. Thank you so much
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