Google Ad Chief Ramaswamy Exits; Search, AI Veteran Replaces Him

(Bloomberg) -- Google is replacing its top advertising executive, Sridhar Ramaswamy, the first major management shakeup at the company's most important business in half a decade.

Prabhakar Raghavan, head of Google's business-applications unit, will step into the role on Friday, the company said. A veteran of search technology and artificial intelligence research, Raghavan will now oversee product and engineering for the world's largest digital-ads business, which is on course to generate more than $100 billion in sales this year.

Raghavan will be responsible for maintaining the pace of growth at Google's search and display ad operations and developing new revenue sources while preventing commercial goals from influencing the company's consumer services. Regulatory pressure and political scrutiny on Google are rising, too, while the online commerce side of the business has fallen behind Amazon.com Inc.

Raghavan, 58, said his first job will be continuity for the ad businesses, which generate most of the revenue for Google and parent Alphabet Inc. "The ecosystem remains strong. The business remains strong. The team is fantastic," he said. "My focus is on how to take that fantastic machine and keep it going rather than being a bull in a china shop."

After spending a total of 15 years at the internet giant, Ramaswamy is joining Greylock Partners as a venture partner. Ramaswamy led the ads business for more than five years. During that time, the company adjusted search results and ads to run on smaller smartphone screens. At first, that was seen as a challenge for Google, but the company now crams multiple ads at the top of search results, which has generated more clicks and a resurgence in growth. Ramaswamy, 51, also spearheaded the development of new Google shopping, travel, video, and app-install ads that have brought in billions of dollars in revenue. Ad sales jumped 24 percent in the second quarter of this year.

Ramaswamy's move may have been brewing for some time. Earlier this year, he was mentioned as a potential candidate to be chief executive officer of online coding community GitHub, which was eventually acquired by Microsoft Corp.

A few months before, Google brought in a new vice president, Suresh Kumar, an Amazon and Microsoft alum, to manage web and display video ads -- a rare outside hire for a business unit typically filled with company veterans. Caesar Sengupta, a Singapore-based deputy of Google CEO Sundar Pichai, recently took over Google's payments business. Meanwhile, some other longtime advertising lieutenants were moved to other projects or left Google, according to people familiar with the decisions, who asked not to be identified discussing unannounced personnel moves.

Raghavan joined Google in 2011, and Pichai tapped him in 2014 to oversee Google's suite of cloud-based business apps, including Drive, Docs and Hangouts. At the time, Pichai had been running Apps, and said he'd left "lots of challenges," Raghavan recalled. "He was self-deprecating."

Under Raghavan, Apps grew from a set of consumer programs to an enterprise service called G Suite with more than 4 million paying customers, now a major contributor to Google's cloud business. He helped introduce AI-powered features, such as Smart Reply, which automatically provides relevant responses to emails, and Smart Compose, which suggests whole sentences for users while they write messages in Gmail. More than 10 percent of English Gmail replies are machine-written and accepted by human recipients now, according to Raghavan, who co-authored some of the patents.

"I've worked with Prabhakar over many years now and can think of no better person to lead our monetization efforts," Pichai said in a statement. "Prabhakar has incredible management experience, and the deep technical expertise to match."

Before joining Google, Raghavan ran Yahoo's research lab where he worked on search, ad ranking, ad exchanges and marketplaces. He also worked for IBM's research arm for many years and co-authored two textbooks on algorithms and information retrieval. He holds a Ph.D. from the University of California, Berkeley.

Raghavan declined to discuss future products or any early plans he may have, saying he has to settle into the job first. He also wouldn't discuss Google's efforts to return to mainland China or recent disputes over the use of Google AI in a Pentagon contract.

He got to know Google founders Larry Page and Sergey Brin in 1996 and 1997 while he was a consulting professor at Stanford University studying how to search for information and analyze links on the nascent world wide web. "These were deep technical discussions and problems that I had my team working on and they had their team working on," Raghavan said. "We would talk about search as a challenge for the ages. What struck me was Larry's conviction that search would remain an unsolved problem for a long time. He has been proved right."

Ads sales and business partnerships still rest under Google's Chief Business Officer, Philipp Schindler. But all product development and technical decisions -- those that determine what search terms, web pages and online videos are paired with ads -- fall under the ads role Raghavan is taking on. He will also oversee commerce-related businesses.

--With assistance from Ellen Huet.

To contact the reporters on this story: Alistair Barr in San Francisco at abarr18@bloomberg.net;Mark Bergen in San Francisco at mbergen10@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Emily Biuso

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