Reading Ben Thompson’s coverage of Google’s earnings call this week, one thing jumps out, and simply can’t be ignored: Google CEO Sundar Pichai was asked a simple question, and, as Thompson points out, Pichai dodged it completely. A Merril analyst asked this question:
“Just wondering if you see any changes in query volumes, positive or negative, since you’ve seen the year evolve and more Search innovative experiences.”
Here’s Pichai’s answer:
“First of all, look, we think about effects on Search, obviously, more broadly. People have a lot of information choices. So — and user expectations are constantly evolving.
And so we’ve been doing this for a long time. And I think what ends up mattering is a strong continuous track record of innovation. Obviously, generative AI is a new tool in the arsenal. But there’s a lot more that goes into Search: the breadth, the depth the diversity across verticals, stability to follow through getting actually access to rich, diverse sources of content on the web, and putting it all together in a compelling way.
And I think, through the year two, when we test, we test Search Generative Experience, particularly against everything that’s out there. And we can see the progress we are making and how much users are liking the experience better. And so I think I feel very good about the progress.”
Not a yes, and not a no. Not a much of anything. More like an Olympic effort at contortion — Pichai was doing everything he could to avoid touching Google’s third rail: AI’s impact on its core cash cow of search. This tendency to avoid uncomfortable truths is understandable, but I think it’s going to come back to haunt the company. What I take away from it is that Google is not sure it will successfully manage the transition from traditional revenue models (AdWords mixed into old-school SERPs) to what its calling “Search Generative Experience” — where the company uses AI to deliver answers that mix various ingredients from the web to deliver a combination of useful information and, it hopes, commercial links that perform as well or better than traditional search monetization approaches.
Google is no longer “just a search company” — it has robust revenue lines with Workspace, Cloud, and YouTube, among others. But search still drives its core profitability, and search remains the product that will determine the company’s future path. At some point soon, Pichai will have to respond to the uncomfortable elephant in the room: Is search usage falling? And when he does, my guess is Wall Street won’t like his answer.