The Exchanges

Q to par, we would get some company that's, but that would be able to do this. Um, so again, like when you think about, you have to prioritize what you work on, you have to decide Um, whether or not to go full steam ahead with this agentic move. Um, how do you go from taking the research and development and deciding when it's time to put it into production?

A I think we're convinced that we're convinced that's the future, and so that leads to the decision to invest and the confidence to invest. Um, you, and then you roll it out to the extent that it's, to the extent it's ready to be rolled out. So some things you've seen us do with search are we start in, in, in labs. Even with AI overviews, which has become a huge success, started as search generative experience in labs, and so that enables us to get started, get our feet wet, and then we build confidence through that to actually know When it's ready for everyone. And so we have a, we also run experiments along the way, et cetera. So we don't have to make these as sort of yes or no, black or white sort of decisions. We're able to invest with the conviction because we know it's the future and then build it and then assess where we are in terms of how, how broadly we roll it out.

AI assessment note: “we start in, in, in labs... enables us to get started... build confidence”

Q urgency to get things in labs, get it tested, this boldness to say, all right, we have a format of search. That might disrupt our current form of search, but we're just gonna roll it out right next to regular search and see what happens. Uh, how did Google go from the company that was, it seemed like, to the outside afraid of generative AI to one that embraces it?

A I think the technology needed a lot of maturation, right? Very early on, if you sort of rewind, uh, rewind to those early days, The technology hallucinated quite a bit. Um, uh, certainly within the context of search, factuality matters a lot. We don't, we don't, you know, people trust that when they, when they search for something on Google, the results they get are, um, are highly accurate, um, they're high quality, et cetera. So, um, that was a, that, that was a big area of concern for us, and the technology was, uh, was, was truly nascent, um, and, and, and had a lot of risks around it. Uh, so we invested, um, aggressively Um, and, and Liz can talk more about this in, um, in grounding, in factuality, in, in getting to that point. And so that was really, I would say that was the real unlock for us is, is, is, was developing the technology and developing, um, all sort of everything around it, um, that we could feel confident that was a thing that made sense to put in front of our users.

AI assessment note: “that was the real unlock for us is, is, is, was developing the technology”

Q terms of the way that it sends traffic to publishers, still nascent the way that you monetize. Uh, but every time I'm like looking at the numbers for the quarter or seeing them come in, I'm just like, huh? You know, it doesn't seem like it should be possible to grow. I think it's like double digits search revenue somewhere in that area. So in this moment, what's going on?

A So there's a few interesting things that are all kind of happening at the same time. Um, the first is, uh, queries continue to grow, um, and we've, and we've shared that on a year-on-year basis, queries are growing. Um, a lot of that is, is propelled by generative AI, right? And so generative AI has been, um, in a lot of ways, a fuel for growth, um, as, as, as users realize they can ask more questions, uh, they can bring more questions, uh, to search. So that's, that's, that's a big part of it. Uh, the second part of it is AIO reviews fit into the existing, um, uh, search results page. The search, the existing search results page has, um, advertising on as well. Um, and so as we drive more queries, um, you know, those queries monetize and, and, and we, and we have an existing, um, advertising model for that, which also drives traffic, um, um, to advertisers who are selling things or enable people to book hotels and things like that. Um, so that, that's, that's another, um, uh, major piece of it. The third piece is, at the same time as all of that's happening on the, on the, on the, on the results page itself, we're applying generative AI to our advertising products, too. Um, and so, you know, the, in a lot of ways, the holy grail of advertising for the longest time has been an advertising come to us with, here's my site, here's how much I'm willing to spend, here's the ROI goal…

AI assessment note: “The first is, uh, queries continue to grow... propelled by generative AI”

Q of someone from like World History Encyclopedia, which is the number two history site, or number two, yeah, number two history site on, on the web after the Library of Congress, that they just like write that content for the LLMs, and then it gets sort of ingested by, let's say, AI mode, and then sorted to users if that's the new way that people want to spend their time?

A I think that's possible, but it's not the bet we're making. The bet we're making is that the value exchange that Search has existed on for years is largely intact, and it still makes sense. Websites make their content available for indexing, and as a result of that, Google sends traffic to those sites. Again, it will vary site by site, right? There's some sites that will do incredibly well, Uh, there's some sites that, that may struggle, um, and, and, but that's been, that's been the history over time when, when we did mobile, a site that didn't adopt mobile, maybe would, would have struggled, et cetera. Or sorry, when, when the world evolved to mobile, uh, you know, different, different, uh, different sites do well, um, uh, through that. Um, but by and large, um, our view is, and, and the approach we're taking is that traffic still matters, and that fundamentally, Users want to visit the web, right? Um, let's give you an example the other day, um, of, uh, I'm going to London, uh, uh, I was looking for a hotel. I was looking for a hotel near a park, convenient to, um, um, to the airport, convenient to a certain train state. I sort of had all of these, all these details that I was looking for. Um, AI mode gave me a nice response. It gave me, gave me some good recommendations. Ultimately though, it's a hotel. I wanted to see a review of that hotel, so I clicked through the review…

AI assessment note: “I think that's possible, but it's not the bet we're making.”

Q You don't oversee it. No longer. Okay. So strike that you were, but you were, we spoke a lot back when you were involved with the assistant. Um, do you think that the way that we interact with the web information online becomes a different form factor than traditional type in the words and get the answers?

A I think it will expand. Um, uh, that's my, um, expectation. People are obviously using chatbots, uh, sort of more these days. In some ways, that's, uh, the evolution of, um, of assistance. Um, our bet, our belief is that people will continue to use search and grow their, grow their usage of search as well. There's probably a meaningful amount of, sort of, Venn diagram overlap, right? There's, um, uh, I think it's unlikely that, that, uh, that the future of search is, Is sort of a companion that you're, um, uh, sort of building, uh, maybe emotion, you know, sort of an emotional relationship with. It's possible, um, but TBD. Um, uh, today what we see is, is, is, uh, people are using both, right? And, and there's certainly, uh, people that are using chatbots. There's certainly still people using search. They go back and forth between them quite a bit. Um, and so I think how exactly this evolves is, um, Um, is, is, is, is still to be seen. Uh, from a search point of view, uh, you know, back to your reinvention point, um, it's, it's, uh, it's critical that we continue to reinvent. Again, I, I mentioned this at the beginning, it's been the story of search, but, um, we, we see these reinvention, we see these reinvention moments to really expand what you can do with search. That's what we're seeing with AI overview. It's amazing to see with AI overviews, the increase in queries, Um, fr…

AI assessment note: “I think it will expand. Um, uh, that's my, um, expectation.”

Q But I want to know about like, So obviously you've seen shift from desktop to mobile. You've probably seen like the cloud shift as well. Shift from portals to search. Where is this the number one shift? Like the most intense shift or is this like somewhere in the middle?

A I think it is the most. There's always, there's always like recency bias and things like this. To me, it feels like Google when, when I started that there's a. Uh, there's a, there's a strong feeling of the sky's the limit. There's a, there's a strong feeling of, of, of opportunity, um, paired with the ability to, we are shipping in search at a pace, I can't even remember, like, it's such a fast pace, I can't even remember, um, and that's fun because the technology is fundamentally enabling, um, us to do things that we might have, might have only dreamed about doing, uh, before, and so, um, You know, again, we don't see these things as scary, and so it's not, um, I didn't ask which is the number one fearful moment. It's, um, uh, it's, it's just a really exciting and, and, um, and, uh, and fun time.

AI assessment note: “I think it is the most. There's always, there's always like recency bias”