In a significant shake-up, Prabhakar Raghavan, the senior executive leading Google’s search engine and advertising products for Alphabet Inc. (GOOGL, GOOG), is stepping down from his position. Raghavan, who has been at the helm of Google’s core revenue-generating business for four years, will transition to a new role as Google’s chief technologist, working closely with CEO Sundar Pichai.
Nick Fox, a long-serving Google executive within the search organization, will succeed Raghavan. This leadership change comes amidst growing challenges for Google’s search business, fueled by the rapid advancements in artificial intelligence (AI) and escalating legal pressures.
The rise of AI-powered products like ChatGPT from OpenAI poses a formidable threat to Google’s search dominance. Tech analyst Gene Munster from Deepwater Asset Management predicts significant announcements from OpenAI by the end of the year, potentially further disrupting the search landscape.
Adding to the complexities, Google’s agreement to remain the default search engine on Apple iPhones is under scrutiny. The U.S. Department of Justice is currently engaged in an antitrust case that could potentially prohibit Google from paying Apple Inc. for this privilege, potentially undermining its search dominance.
Furthermore, discussions surrounding a potential breakup of Google have emerged, with analysts suggesting that such a move could unlock significant value for the company. However, the likelihood of such a split remains low.
Raghavan’s departure comes at a pivotal moment for Google, as it navigates the evolving search landscape. His decision to return to his scientific roots underscores the growing importance of AI in shaping the future of search. It remains to be seen how the leadership change will impact Google’s efforts to maintain its dominance in the face of these emerging challenges.
Alphabet Inc. Class A shares closed at $162.93 on Thursday, down 1.35% for the day. The stock slightly rebounded 0.25% in after-hours trading. Year to date, Alphabet Inc. Class A has risen by 17.92%. Similarly, Alphabet Inc. Class C shares finished at $164.51, down 1.34%. After hours, the stock climbed 0.23%. Year to date, Class C shares have increased by 17.88%.