October 18, 2024 — Prabhakar Raghavan, the senior executive overseeing Alphabet Inc.’s Google search engine and advertising divisions, is stepping down from his role. This transition occurs as the company confronts significant challenges within its search operations, including competitive pressures from emerging AI technologies.
Leadership Transition
Nick Fox, a seasoned executive within Google’s search team, will succeed Raghavan, who has led the company’s primary revenue-generating sector for the past four years. Raghavan, 64, will transition to a new position as Google’s chief technologist, collaborating closely with CEO Sundar Pichai. In a message to staff, he expressed, “Now feels right to return to my roots as a scientist,” highlighting his commitment to technical innovation.
Challenges Ahead
The leadership change comes during a tumultuous period for Google’s search business. The company faces increasing scrutiny from legal authorities and competition from advanced AI products, such as OpenAI’s ChatGPT. According to Gene Munster, a tech analyst at Deepwater Asset Management, OpenAI poses a significant competitive threat to Google’s search market, despite its partnership with Microsoft Corp. Munster anticipates major announcements from OpenAI by the end of the year that could further disrupt the industry.
In addition, Google’s ongoing arrangement to remain the default search engine on Apple iPhones is under investigation. The U.S. Department of Justice is pursuing an antitrust case that could potentially prohibit Google from compensating Apple Inc. for this advantageous position, threatening Google’s dominance in search.
Future Outlook
Conversations surrounding a possible breakup of Google have gained traction, with analysts suggesting such a move could unlock substantial value. However, the likelihood of this scenario remains uncertain.
Stock Performance
On Thursday, Alphabet Inc. Class A shares closed at $162.93, reflecting a 1.35% decline for the day. In after-hours trading, the stock showed a slight recovery, rising by 0.25%. Year-to-date, shares have increased by 17.92%. Similarly, Alphabet Inc. Class C shares ended at $164.51, down 1.34%, with a minor after-hours increase of 0.23%. Year-to-date, Class C shares have also risen by 17.88%, according to Benzinga Pro data.
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