Google Reshuffles Search Leadership While Navigating AI Threat To Core Business

Prabhakar Raghavan, the senior executive in charge of Alphabet Inc (NASDAQ:GOOGL) (NASDAQ: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