His compassionate style helped propel Sundar Pichai to the top
at the search giant. Now, he's contending with possible antitrust
lawsuits, a recent revenue drop and pressure to prune Alphabet's
empire -- or chart a new path for the company.
By Rob Copeland
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 12, 2020).
If there's one thing most people agree on about Google chief
executive Sundar Pichai, it is that he is nice.
"He's really thoughtful and incredibly kind," says Google
hardware chief Rick Osterloh. "Sundar's temperament is just
excellent," says former executive Keval Desai. "He always loves
sharing stories about his kids," says current Googler Rishi
Chandra.
So it seems fair to say that Google, one of the world's largest
and most influential companies, is led by a stand-up guy. His
deliberately low-key style helped get him the top job at a company
with a history of clashing personalities.
Almost everyone also agrees, however, that won't be enough for
what looms next.
State and federal prosecutors are expected to file antitrust
lawsuits as soon as this month, asserting that Google's colossal
advertising operation rigs prices artificially high. The
allegations, which Google broadly denies, cast Mr. Pichai in the
opposite role to one he held early in his career. Roughly 15 years
ago, he was Google's point person for antitrust regulators -- and
he helped convince European authorities to file charges against
then-dominant Microsoft Corp., former executives say.
Google, long revered in Silicon Valley for its brainpower and
creativity, is also in an extended stretch of innovation stasis.
Nearly all its recent growth has come from vacuuming up ever more
online advertising. Google has yet to have a hardware hit despite
years of well-funded efforts, and outlying arms such as Waymo, the
self-driving car division, bleed money with few results to show so
far. The company hasn't had a big consumer hit in a decade. Amid
the pandemic, it posted lower quarterly revenue for the first time
in its history, while other tech giants powered through with strong
results.
Those pressures mean that Mr. Pichai, 48 years old, may need to
start making the sort of painful choices he has been able to avoid
so far. Prosecutors could try to force him to prune key pieces of
Google's global empire. He's also facing internal pressure to chart
a new path for the search giant beyond digital advertising.
Mr. Pichai, chief executive of Google since 2015, was promoted
in December to lead parent Alphabet Inc., replacing company
co-founder Larry Page. The elevation capped a 16-year tenure at
Google that brought Mr. Pichai from an unknown product manager into
Mr. Page's "L-Team," an inner circle of executives. Almost everyone
else on the team has left Google, felled by a mix of strategic
errors, opportunities elsewhere and a cluster of alleged sexual
harassment.
Mr. Pichai has largely avoided outright conflict in a company
that thrives on it. He has built allies across the company, having
taken on projects across Google's myriad arms, as well as in the
executive suite, including a few trips to Burning Man with Mr.
Page. He is quiet in most meetings and silent in others, frequently
answering questions indirectly or asking for more time to make
decisions in private. He can be seen pacing the halls, alone with
his thoughts, before big meetings, employees say.
"He got the CEO job," says Mr. Desai, "because he was the only
person who didn't want the CEO job."
Founded in 1998 as a search engine with a mission to "organize
the world's information," Google is one of America's last great
conglomerates, with more than 200,000 full-time and contract
workers.
Parent Alphabet serves billions of global consumers on and
offline, including a hardware division, its YouTube video platform
and an internet provider.
Plenty is going right at Google. Since Mr. Pichai's promotion at
Google in October 2015, Alphabet stock is up 112%. The company
churned out $35 billion in profits in the past year alone.
A creature of habit, Mr. Pichai frequently goes to the same
takeout Mexican spot for a vegetarian burrito on visits to Google's
offices in Seoul. He travels with his own ginger ale and ginger
lozenges in case he falls ill, and is a chewing gum fanatic.
Colleagues say they know they can often catch a few moments with
him at Google's free commissary, when he reloads on gum daily.
Mr. Pichai can be cautious to the extreme. In late July public
testimony for the House of Representatives, he declined at first to
answer whether Google would disavow the use of slave labor to
manufacture its products, saying he would need to "discuss it
further."
Amazon.com Inc. chief executive Jeff Bezos, asked the same
question a moment later, answered, "Yes."
Some current and former executives say they find it hard to read
his mood. Several top executives, including the former heads of
cloud computing and search, have resigned out of frustration with
his languid pace of decision making, people familiar with their
decisions say.
"If there is a current criticism of [Mr. Pichai] inside Google,
it's that there are too many competing voices and not enough
perspective from Sundar on what we actually need to do," says one
current Google executive.
Mr. Chandra, vice president of Google's Nest unit, says last
year he sent the CEO a prototype smart home controller, and
received only one piece of feedback: Add a selfie mode to the
camera. Mr. Pichai said the note came from his kids.
Mr. Pichai, along with Mr. Page and Google co-founder Sergey
Brin, declined requests to be interviewed. Through a
representative, Mr. Pichai suggested several current and former
subordinates and colleagues to speak on his behalf. Though all were
complimentary of his leadership, few appeared to know him well
personally. One said he loved margaritas; another said Mr. Pichai
preferred Italian wines.
"He's compassionate, so he cares about people," says Hiroshi
Lockheimer, a Google senior vice president who oversees divisions
including mobile platform Android and browser Chrome. "It's the
kind of thing that you feel, but you can't necessarily say that one
moment that it happened in the case of."
Mr. Pichai's low-key image can mask a deft hand at internal
politics, one that prizes appearances and fealty to the company,
current and former executives say. One former executive recalls
once disagreeing with Mr. Pichai in a meeting with Mr. Page. Mr.
Pichai showed no reaction in the moment, but cornered the
subordinate right after they left the room. "We should never
disagree in front of Larry," Mr. Pichai said, quietly.
Stepping in
Unlike Mr. Pichai, the company's longest-serving chief
executive, Eric Schmidt, reveled in the spotlight. Hired in 2001,
he oversaw the acquisitions that continue to form the backbone of
modern Google, including YouTube, Android and the advertising
powerhouse DoubleClick. The company's 2004 initial public offering
helped make Mr. Schmidt a multibillionaire, which he parlayed into
roles as an influential political donor.
In 2011 Mr. Schmidt was succeeded by Mr. Page, which the company
said was to speed up decision making. Mr. Page, whose hard edges
include a tendency to dismiss ideas he doesn't like as "stupid,"
vastly expanded the company's so-called moonshot bets and debated
big ideas including acquiring Tesla Inc. He plowed Google into
disparate ideas such as balloons that beam internet access from the
sky, and a scientific unit that tries to come up with solutions to
combat the aging process.
In 2012, Mr. Page announced he suffered from a rare vocal
paralysis and bowed out of most public appearances. Into the void
stepped a group of lesser-known executives.
They included Mr. Pichai (pronounced pih-chai), who was an old
hand inside Google. Born in midsize city of Madurai in southern
India, he slept on the living room floor next to his younger
brother for years growing up. Mr. Pichai would later tell
colleagues that two of the most memorable moments of his childhood
were the days his family bought a refrigerator and a rotary
telephone.
"He relates personally to what it means when a piece of
technology comes in and fundamentally alters your life," says
Google's Jennifer Fitzpatrick, one of the company's first
employees.
Mr. Pichai earned an undergraduate degree from the Indian
Institute of Technology in Kharagpur, and later went to both
Stanford University and the Wharton business school on
scholarships. Mr. Pichai's first plane ticket to the U.S. cost his
father, an electrical engineer, the equivalent of more than a
year's salary.
He joined Google in 2004, after positions at semiconductor
company Applied Materials and consulting firm McKinsey &
Co.
These were boom times in Silicon Valley and at Google in
particular. After a bumpy road to an offering, the company's IPO
was a hit, and the company was flush with cash and new ideas. Mr.
Pichai was put in charge of an effort to convince competitors like
Dell Inc. to essentially pre-install the company's flagship search
engine on computers world-wide. It was a success.
Mr. Pichai began to receive top assignments. He worked behind
the scenes to organize data and present Google's case to antitrust
regulators against Microsoft, then owner of the dominant internet
browser. The European Union later fined Microsoft a record $732
million for alleged competitive infractions -- a penalty that would
be exceeded only by Google's own $5 billion punishment in 2018,
when Mr. Pichai was CEO.
Mr. Pichai became more well-known, at least among technologists,
in 2008, when he co-led development of the Chrome internet browser,
a faster, stripped-down version of Microsoft's Internet Explorer.
Chrome now has roughly 70% of global market share.
Dominance
As Google rose to prominence, Microsoft became a bit of an
obsession among executives. Every Monday as CEO, Mr. Page would
hold all-day meetings with his direct reports, including Mr.
Pichai, in which they would agonize, "How do we not become
Microsoft?" recall two people present. They feared turning into a
company that surrendered its dominance.
Mr. Pichai's approach has been to choose incremental
advancements -- along with doubling down on Google's house
products.
Around 2012, he clashed with Vic Gundotra, then head of social
platform Google Plus, about rolling out messaging features to
Apple's iPhone before Google's own products. Mr. Gundotra argued
that Google's technology couldn't yet handle the feature. Mr.
Pichai slapped the table in frustration, a person present says, and
responded, "I don't even know what to say." He didn't want the
feature out until it was ready across devices. Mr. Pichai
prevailed.
One of his last major promotions before becoming CEO gave him
oversight of Android, the mobile software arm. There, his major
move was to clip the unit's ambition, two former employees say. He
axed formal plans to make Android the dominant software across all
of Google's products, reasoning that attempts to integrate them all
would lead to internal conflict.
One upshot of decisions like that is that Google can sometimes
appear a collection of loosely related fiefs, with its products
more weakly integrated with one another than at Apple and
elsewhere. In messaging, Google runs competing applications called
Meet, Chat, Messages, Duo and Hangouts. The company has said it has
no plans to combine them.
Mr. Pichai is uncomfortable delivering hard news. Tony Zingale,
former chief executive of Jive Software, recalls Mr. Pichai's agita
in 2014 when he told Mr. Zingale he would have to resign from
Jive's board to devote himself to Google. Mr. Pichai appeared
nervous and contrite, until Mr. Zingale told him all was forgiven.
"You could just see him exhale," Mr. Zingale says.
"He agonizes over decisions. I've told him that before," says
Twitter Inc. chairman Patrick Pichette, a former Google executive.
"I don't think there are enough Rolaids in the world for
Sundar."
In 2015, Google split itself into the conglomerate Alphabet. Mr.
Page's first instinct was to remain chief executive of Alphabet and
have no CEO of Google, but company advisers told him that was
dubious under securities law, a person briefed says.
Instead, Messrs. Brin, Page and Schmidt retained control of the
company's voting shares, giving them final say over company
decision making. Mr. Pichai became CEO of Google, while Mr. Page
led Alphabet.
Mr. Pichai beat out internal rivals including YouTube CEO Susan
Wojcicki, who asked the company founders to let her report directly
to Mr. Page. Mr. Pichai argued against it, and won.
Ms. Wojcicki said, in a statement through a spokesman: "I
discussed YouTube having its own identity and culture to better
serve our users, not being separate from Google."
Mr. Pichai for the first time visibly enjoyed the trappings of
his role. He ordered an elaborate renovation of his executive suite
to add an array of couches and more private space. A spokesman
calls it a "collaboration area." Some at Google coined a different
term for the new layout: Sundar's Palace.
As Google CEO, Mr. Pichai's purview now included all of Google's
online advertising business, a colossus that takes up nearly a
third of the $130 billion U.S. digital ad market and accounts for
nearly all of the company's profits. This includes ads that run on
Google's flagship search engine, as well as others that run on
external websites but are placed by Google.
Again, Mr. Pichai took an incremental approach. Around the 2016
presidential election, Google's top advertising executives
presented him with a proposal to end political advertising on
search. They pointed out that political advertising amounted to
minimal revenues, with a disproportionate headache.
Mr. Pichai overruled them, in part to avoid making political
waves, people briefed say. Google continues to take political ads
this election.
Firestorm
Mr. Pichai couldn't avoid politics in August 2017, when an
internal memo kicked up a firestorm among the company's typically
left-leaning workforce. In it, Google engineer James Damore
suggested that men might be better suited for tech jobs than
women.
Playing against type, Mr. Pichai moved quickly. Though some of
his deputies urged him to let the incident boil over, he fired Mr.
Damore within a week. The move made Google a renewed public enemy
for conservative critics, and led to a lawsuit from Mr. Damore,
later settled.
A willingness to bend to employee criticism soon damaged Mr.
Pichai's relationship with one of his top deputies, Diane Greene,
an Alphabet board member and head of Google's cloud computing
division. Ms. Greene had discussed with Mr. Pichai the company's
bidding to renew Project Maven, a Department of Defense project to
better integrate artificial intelligence into its computer systems.
When employees found out in 2018, however, thousands signed a
petition objecting to the work.
Ms. Greene, believing she had Mr. Pichai's backing, defended the
work, and was dismayed to be instructed to publicly reverse course
due to the outcry. The incident helped force her departure from
Google in early 2019, people briefed say.
John Giannandrea, now head of artificial intelligence at Apple,
resigned from Google a few months earlier for similar reasons, the
people say.
Several current executives say Mr. Pichai sees Google's role as
a big tent, one whose products can improve the lives of its many
users. In interviews set up at Mr. Pichai's request, several said
that the chief executive had requested the company's artificial
intelligence software, known as Google Assistant, work in languages
other than English. He has pushed for the company's software to
work on even its least expensive equipment.
In January, before coronavirus was international news, Mr.
Pichai spent hours at home reading local media in Asia, and became
convinced it would be a threat. The conglomerate was among the
first major employers to send workers home in mid-March, and was
the first major American corporation to extend the order to
mid-2021. Mr. Pichai personally made the call, people briefed on it
said.
He himself has continued to work in person at Google's Mountain
View, Calif., headquarters, where the pressure facing the company
is beginning to weigh on him, says longtime friend Caesar Sengupta,
a Google vice president.
Some 13 years ago, the two split an office, where they played
jokes on each other. One time, Mr. Pichai sent a fake resignation
letter on behalf of an employee to Mr. Sengupta.
"The weight of the world is quite heavy on those shoulders," Mr.
Sengupta says. "I haven't seen him prank anyone in many, many, many
years."
--Liz Hoffman contributed to this article.
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
September 12, 2020 02:47 ET (06:47 GMT)
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