Beijing time on may 20 afternoon news, like all large technology companies, Google and Alphabet during the new corona virus pandemic, Google and Alphabet played an extraordinary role in our lives. Whether it’s helping people find reliable information when searching, working with the government on virus detection, developing track systems with Apple on Android and iOS, or cracking down on false information on YouTube, Google’s capabilities and responsibilities are greater than ever.
Sundar Pichai, chief executive of Google and Alphabet, recently gave an interview to Vergecast about the challenges Facing Google faced during this period, including the challenges of its core advertising business and the challenges of telemanagement companies. Pichai himself adapted to working remotely; he spent more time reading and thinking, usually on the way to work. He then started from scratch, following a YouTube video tutorial and learning to make pizza.
Mr Pichai also talked about Google’s investment in hardware, including the Pixel phone line, and how the company will continue to work to simplify its “complex and well-known” messaging policy.
Here’s the full interview:
Nilay Patel: There are three things I’m interested in. First, how does Google respond to this outbreak? Second, how your business has been affected. Third, I’ve talked to every CEO about time management, and I believe that remote management of a company as big as Google will certainly have different time management. I’d like to talk about these topics. But there are two more big news stories about Google that are important . I’d like to ask a few questions about these two news stories first. First, an NBC report noted that the company’s work on diversity is already declining, and that the word “diversity” is no longer even mentioned within the company. Is it true?
Sundar Pichai: Diversity is our fundamental value. Given the size of our product generation and the fact that we serve our users locally, we are particularly committed to maintaining diversity in our workforce. I think we were one of the first companies to start publishing transparency reports and have been sharing them ever since. We’ve also just released our most recent annual diversity report. We have made some progress in key areas. There is still a long way to go. But diversity is important.
What we do has always matched our size. The first thing we think about is what works and what can expand better. All I can say is that our investment in diversity is now greater than at any time in the company’s history in terms of size and resources.
Patel: Part of the report is interesting because it used to involve Facebook. But I don’t know if we’ve really spoken to People at Google. It’s your measures and the way you manage your company, and it’s more in response to conservative criticism. Do you take into account which side the criticism comes from?
Pichai: Our diverse work doesn’t take any of the angles you say. As an industry, as a company, we still lack diversity in many areas. So there’s a lot more to do. The others we didn’t think much of. Personally, I think we’ve done a lot of work within the company to make sure that the company can accommodate all kinds of ideas and that everyone has a sense of belonging, regardless of political views or otherwise. That’s it, I think it’s two separate things.
Dieter Bohn: Another big story that happened yesterday was that Mario Queiroz and Marc Levoy had quietly left the Pixel department. And the Pixel’s sales figures aren’t particularly good. So is the Pixel business at the level you’d expect?
Pichai: I’ll talk about hardware first, and then I’ll talk about pixels. The last few years have been a major consolidation phase for us as we are trying to integrate Google hardware with Nest. We acquired HTC’s mobile division. So there’s a lot to run into in between. Then, our portfolio is also very broad. So the past few years have undoubtedly been a construction phase. In the long run, we will do our best. It’s not easy to do hardware. It involves a variety of components and takes time to prepare, like the bottom silicon wafer or display or camera, etc. Of course we are actively investing, but these also take time. In short, I believe that we are making great progress.
The Pixel 3A, released last year, is our highest-rated NPS product ever and is definitely the benchmark product on the market. So, for me, it shows that we’ve come a long way. We just released Pixel Buds this week, and the response has been good. Our Next Home Hub products are also doing well.
What we see as long-term development. We’re not just limited to mobile phones. We have a vision of the future direction of computing. I believe that this vision cannot be separated from the combination of hardware, software and services. You have to think about the intersection between them. It’s very valuable to look for this intersection and then do it.
In the process, of course, we are bound to encounter some setbacks. We are still new in this complex field, and everything will not be easy. But I’m still looking forward to the products we’re going to launch later this year. Especially in the long run, because some of our deep-seated work takes three to four years to see the results. When these efforts pay off, I look forward to the way they shape the direction of the company.
Bonn: I remember asking you the same question every year since i started this department: “How serious are you about hardware?” “And then, like a self-driving car, you always say, “This is a five-year plan.” “But the five-year plan always seems to be five years, withno progress. So, what you’re talking about in the long term still means that hardware really pays off, such as significant sales and significant market impact? Or are you expecting something more direct?
Pichai: I mean, we’re going to think about our hardware work within the overall computing scope and the state of our current ecosystem. We will take these factors into account. I think it’s also important to build a financially sustainable business. Because I’m focused on the level of investment that hardware needs, including all the technology development you have to do, the supply chain you need to develop, the investment in the market, and so on. So it’s a huge investment. To do this well, you must have a clear and clear goal that is financially sustainable. This is important.
For me, there are three reasons. One is to push the calculation forward. Second, effectively guide our ecosystem. Everything we’ve done is doing well at the moment, going back to the early days of Android, and the Galaxy Nexus we worked with Samsung is an important phone. Nexus 7 in the tablet field. And Chromebooks. We use raw hardware to guide the development of our ecosystem. Then I’ll look at areas that we haven’t delved into, like smartwatches. Then you’ll find that it’s not easy to guide an ecosystem — building the underlying platform — the way you want it to be.
This is the second reason. And then the third is to build a truly sustainable hardware business. All of this is important and I’m looking forward to it. Rick Osterloh’s team, with his team, and Hiroshi Lockheimer, have long-term visions. We are all trying to move towards our goal.
Bonn: You’re not only Google’s CEO, you’re also the CEO of Alphabet. How much time can you devote yourself to hardware? Can you look at the prototype? Or the level of participation in a weekly meeting? Or, hardware takes up most of your time?
Pichai: I think it’s just a coincidence. I also discussed next year’s product with the hardware team this morning.
Bonn: Can you tell me a little?
Pichai: I’ll know then. That’s a good question. Rick and Hirosh are in charge of these tasks. But over time, I want to spend less time and less intervention on their big projects.
Patel: Bonn said he just evaluated The Galaxy… A51?
Patel: It’s a cheap phone. He gave him seven points. The reason we measure it is
Pichai: I saw you in the introductory video and said, “This phone has sold more than the Galaxy.” “I saw the video.
Bonn: Actually, it was the world’s best-selling phone last quarter.
Pichai: I learned it from your video. It’s kind of interesting. Maybe I should have known this.
Patel: So my question is, but when we see you release your new phone, we think, will you compete with Samsung’s flagship device? Will you compete with the iPhone? What’s your location? Will you launch a heavyweight flagship phone that will split the top market share?
Pichai: I just mentioned The Pixel 3A because we’ve clearly demonstrated a strong value proposition in this section. That said, if you want to move computing forward, you can’t ignore the high-end models. So we’ve put a lot of effort into that.
So you’ll continue to see us invest in both low-end and high-end equipment. We treat different levels of equipment the same – and we’re currently developing entry-level devices for our ecosystem. I personally are looking forward to it. However, we actually invest more in high-end equipment. On high-end devices, you’ll see some of our underlying investments pay off. It takes time to build up, about two to three years of in-depth investment, before you can get things done.
Bonn: Have you seen — especially now that everyone is home — a noticeable change in consumer behavior in terms of hardware consumption? Does everyone go out and buy a Nest camera? Or do they feel they don’t need these cameras for the time being because they’re staying at home now? What do you think has changed?
Pichai: Obviously, on the software side, it’s clear to us that the outbreak has an impact on the use of some products. Some products have also been adversely affected. But we can measure these effects. But hardware is a bit complicated because it’s actually constrained by the supply chain, which has different effects on different products, and of course demand. Some are due to a lack of proper retail work and so on. So I find it hard to predict when demand will recover. At least I don’t think so.
Patel: Let’s change the subject to talk about Google’s other businesses and developments. Bonn mentions consumer behavior. So I just thought, has Google Maps usage dropped?
Pichai: It’s definitely down. You don’t use Google Maps alone to make it less us. (It’s a joke, don’t mind.) )
Patel: I’ve been using Google Maps.
Pichai: To be honest, Google Maps usage has really dropped significantly — obviously, because people don’t drive much out. You can see this effect very intuitively. But what’s interesting to me is that over the last two to three weeks we’ve seen users go back to Google Maps looking for local information. So, we’re seeing a pick-up in user activity, people starting to search for services on Google Maps, searching for nearby businesses that have opened, and so on. People are slowly starting to look for and discover local services. This is an obvious inflection point, but it doesn’t tell the whole picture. But at least the trend is there.
Patel: And then for the rest of the broader business – obviously most of Google’s revenue comes from advertising. We are already feeling the impact of changes in the advertising market. The impact of changes in the advertising market is being felt all over the world. So how do you see the impact on Google? What’s your strategy?
Pichai: I mentioned that in the earnings conference call. The impact of March is more pronounced than in January and February. So, to be sure, Google is not immune to the global economy. In some ways, it is representative of all industries. It is clear that all sectors have been affected – tourism is a particularly bad example – and we feel that.
Interestingly, search is very ROI-oriented and performance-oriented compared to past cycles. So advertisers will take action. They will retreat quickly. We’re seeing changes in demand and people adapting. But you’ll see the activity in “Office Furniture” right away. So you can see real-time changes in the economy. These trends are very interesting. But there is no doubt that our business has been affected.
Bonn: In your earnings conference call, you suggested that the impact would not be addressed immediately in the next quarter. We are in a difficult time. But no matter how long it takes to get out of these effects, do you think the advertising market will shrink significantly compared to a year ago? Or do you think your advertising business or the business as a whole will see a fundamental change? Or is it too early to say that it is difficult to predict the future?
Pichai: The question is, everyone is thinking: Are the anecdotes you’re seeing back to average? Can the tourism industry return to the level it was in the past? Wait a minute.
Given the nature of the virus, it is indeed difficult to predict how long the outbreak will last. We generally think that the impact of the outbreak will last for some time. I think this is the right way to look at the outbreak. As a company, we assume that it will take a long time to get back to normal, and then we’ll plan for that. Other, I can’t say.
I think that in terms of social interaction, the need to meet people is the most basic. Personally, I can’t wait to get back to my normal form… Want to go to the ball game or something.
Do I want to go to the concert? Of course, why not! So I believe that the inherent needs of mankind are there. But I think it’s going to take a while to get back to normal. I think it should be a slow but steady recovery.
Patel: So what do you think of the need for a recovery of the economy? At Google, you tell you that you’ll be working remotely from home throughout 2020. So what do you think of Google? Then, more broadly, what do you think of the need for a recovery across the United States?
Pichai: At first, I thought we were one of the first companies to start allowing people to work from home, partly because I thought it made sense to keep employees healthy and healthy. I think that since most of our work can be done at home, it is of course necessary for us to support and advocate for social distance. Clearly, this demand varies widely from group to group. The hardware we talked about earlier, it has to be used in test equipment, labs, and that’s important. You have no way to test whether something works in a 5G environment within a test environment.
So there are big differences between different teams. However, we will take a conservative approach in asking everyone to go back to work. Where permitted by local ordinances, we will first bring 10 to 15% of our employees back to work, giving priority to those who really need to return to work. In this way, we can maintain low environmental density and implement various safety measures. And then we say that 10 to 15 percent of the workforce doesn’t mean that’s the actual number — we might take a rotation approach to get more employees back to work every week and every other week.
Then you’ll find that people have two very different attitudes to this. Some very much want to go back to work in the company, they miss this scene. Especially at Google, we’ve been investing really in our office environment and creating a culture for more than two decades so that people can collaborate better. So, I know, depending on their personal circumstances, some people will miss that experience. But there are others who are more conservative. So we will try to take care of everyone’s feelings.
But I hope that by the end of this year, our production capacity will be restored to 20%-30%. That said, we can have almost 60% of our employees go back to work once a week, or something like that. So that’s what we’re saying, most employees will be working from home until the end of the year. But this is a dynamic situation. If the situation improves, we will adjust accordingly. We want to maintain good flexibility. Try to really understand what works and what doesn’t work in this situation.
Bonn: Do you have long-term considerations about the number of people working from home or remotely? Twitter has announced that it can work permanently from home. That is, you can work from home all the time if you want. Do you have a similar plan? Or do you want to wait and see for a while?
Pichai: I want to speak with data. All I think of as a research phase, and then look at how the data guides us. In some ways, I’m glad Twitter is experimenting with this kind of “extreme.” So thank you Jack Dorsey. Can give us such a reference.
In some ways, productivity has indeed fallen. What I don’t know is that in the first two months, most of them have been working on the project at hand, so they know what to do after that. But then, in the next stage, say, if you’re designing next year’s product, you’re in a brainstorming phase, and things are still in a mess. At that time, how to collaborate? This is difficult to understand and difficult to operate. So, this is what we want to figure out, to figure out what can and what can’t.
We may adopt a more conservative attitude towards this. We want to make sure everything is okay. But from all this point of view, are we all learning, do you have more flexibility in dealing with this matter? I think the answer is yes, I’m willing to make this bet.
Patel: Next, I’m going to probe you into the message application strategy. I’m going to work with me.
Pichai: It seems impossible to join your podcast and not talk about our messaging app.
Bonn: Pop quiz, Hotspot, all kinds of products, just do.
Pichai: The complexity of our messaging application is to keep you out of the way.
Patel: Google has always been good at internal testing and using its own products. Obviously, at this point in time, the way these products are used has never been taken as seriously as before. You’ve added a group view to The Met. It was as if there was supposed to be a button here, but all of a sudden people found out that the button wasn’t there, and then all of a sudden it came up again. But there are some bigger competitors. More consumer-facing companies are succeeding, such as Zoom. Do you have a clear attitude towards the moment? For example: “We have to win this battle.” We know what to do because we’re also trying to use our products. “
Pichai: Of course this is a very important moment. A few months ago, Javier Soltero joined us. We know exactly what we want to achieve. As a result, some work is already under way. And then in some ways, when the outbreak broke out, we haven’t fully addressed the changes we’ve expected.
I think the contrast between the Google Meet team developing and iterating products and working remotely to achieve the results they expect is interesting. Javier lives a little far from the company, but is actually far away, and one of his biggest concerns when he joins us is the commute. But his job now is entirely remote. But this is an important moment. Many schools and organizations are already using Google Meet. Therefore, we are also redoubling our efforts.
Clearly, the outbreak blurs the line between consumers and businesses. People use these products in various scenarios. So there’s no doubt that we see it as an opportunity to expand the scale of Google Meet and Google Chat to make both products work better.
Of course, we are service providers, but we are also a platform. So the same is true of RCS (Rich Communications Services) and all the work we do. In this rcS, our role is like the United Nations, bringing together people of all kinds. So the actual progress is better than it looks, because you’ve got a lot of people on it. When they sign up, you can see more and more momentum.
So I think it’s a good blend. I’m also very happy that my cooperation with Javier has been particularly smooth. He works not only with our cloud service team, but also with our platform team. I think we’re in a very good position at the moment.
Bonn: You mentioned RCS. Then I’m going to ask…
Pichai: I knew Bonn had something to say.
Bonn: When Facebook says, “We’re going to integrate all of the company’s communications products and fully end-to-end encryption of everything,” do you think Google’s route to offer multiple products in multiple scenarios will work? Or do you think more consolidation is needed?
Pichai: We want more integrated, simpler views. But in all scenarios, our platform is serving services. Android is open source as part of the open platform stack. I think you’ll need an open standard communication framework. Then it started in the age of SMS.
We will continue to maintain this route in all scenarios. Because we believe this is part of building an open stack. At the moment, I don’t think anything will change. But when it comes to our services, I want to simplify as much as possible. And compared to Google Meet and Chat, I think we’ve made very good progress. We launched Duo for consumers, and then Google Meet and Chat for businesses. But the line has become blurred. The underlying of these tools uses the same technology. They are all developed based on WebRTC and have a lot in common. And given that they have a common team, it is not a problem to expect future iterations.
Overall, I think there’s still some flexibility here.