Google Reshuffles Search Leadership While Navigating AI Threat To Core Business

Prabhakar Raghavan, the senior executive in charge of Alphabet Inc GOOGL GOOG owned Google’s search engine and advertising products, is stepping down from his position.

What Happened: Raghavan, who has been at the helm of Google’s core revenue-generating business for four years, will be succeeded by Nick Fox, a long-serving Google executive within the search organization, reported The Wall Street Journal on Thursday.

Raghavan, 64, will take on a new role as Google’s chief technologist, working closely with CEO Sundar Pichai. “Now feels right to return to my roots as a scientist," Raghavan said, in an email to staff, according to the report.

The shake-up comes at a time when Google is facing mounting challenges to its search business, including legal pressures and the emergence of AI products like ChatGPT.

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Raghavan, who joined Google in 2012, has been a key figure in the company’s efforts to integrate AI-generated answers into its search engine, a move that has sparked controversy.

Why It Matters: The leadership change at Google comes at a time when its search business faces potential disruption from OpenAI. According to Gene Munster, a tech analyst at Deepwater Asset Management, OpenAI could become a formidable competitor in the search market, despite its ties with Microsoft Corp . Munster anticipates significant announcements from OpenAI by year-end.

Additionally, Google’s deal to remain the default search engine on Apple iPhones is under scrutiny. A landmark antitrust case by the U.S. Department of Justice could potentially ban Google from paying Apple Inc. for this privilege, further complicating Google’s search dominance.

Moreover, discussions around a potential breakup of Google have surfaced, with analysts suggesting it could unlock significant value. However, the likelihood of such a split remains low.

Price Action: Alphabet Inc. Class A shares closed at $162.93 on Thursday, down 1.35% for the day. In after-hours trading, the stock slightly rebounded 0.25%. 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%, according to data from Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

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Posted In: EquitiesNewsManagementKaustubh BagalkotePrabhakar RaghavanSundar Pichai
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