CNBC: Sundar Pichai, CEO of Alphabet and Google, interviewed by Deirdre Boza.

CNBC

Google CEO Sundar Pichai said that while consumers put the Covid pandemic in the rearview mirror, the economy is clearly a growing concern for the company and the wider market.

“We definitely see uncertainty ahead, like everyone else,” Pichai told CNBC’s Deirdre Bosa in an interview Wednesday at Google’s annual I / O conference in Mountain View, California. “The good thing is that we have existed as a company for some time. [We] we have worked in times like this, be it 2008 or the first days of the pandemic, and we are looking at the long term. “

He also said he believed the economy would “take time to overcome” the current high rate of inflation.

“What gives uncertainty is that there are so many different factors, whether it’s supply chain problems or rising energy prices,” he said.

“I think people see relief in certain sectors,” he suggested, citing travel as an example. “But then you have other new areas that are showing problems, perhaps due to supply chain constraints … Energy is a problem, for example. In some cases, rents have gone up and food prices have gone up.”

Nasdaq is heading for its steepest quarterly decline since late 2008, when the economy was in a state of housing crisis. Consumer prices jumped 8.3% in April, the Bureau of Labor Statistics said on Wednesday, higher than expected and close to a 40-year high of 8.5%.

Shares of Alphabet, a parent of Google, fell about 22% this year, falling sharply along with the rest of the technology sector as fears of inflation and higher interest rates push investors to assets that are considered safer. time of potential decline.

Alphabet’s earnings at the end of April fell short of analysts’ forecasts, largely due to a large YouTube gap that had accumulated with other digital advertising companies in the first quarter. Executives cited lower YouTube advertising spending in Europe after Russia invaded Ukraine in February.

“Obviously when you serve [ads] across the economy …. many of the macroeconomic factors such as GDP growth ultimately affect advertisers’ spending, “Pichai said.

Pichai said economic history is not entirely doomed. Based on comments last month by Alphabet CEO Philip Schindler, he noted that people are on the move again, which is an important indication of Google’s main advertising unit.

“We are definitely seeing the journey resume,” Pichai said. “There are signs that people are obviously moving after the pandemic and so there is some return to normalcy. But what gives uncertainty is that there are so many different factors, be it supply chain problems or rising energy prices. And so we try to bring it all together, that’s where the uncertainty is. “

Pichai cited the company’s technology investment as a vital way to keep his business strong in times of weakness, and did not say the company plans to delay hiring or retire in certain areas.

“We want to be resilient in times like this. We are very excited about the upcoming opportunities. And that’s why we invest. We continue to hire, attracting great talent. There are areas where we are where we see worldly transformation, such as cloud and digital transformation [we] continue to invest. “

Alphabet increased its R&D spending by 22% in the first quarter from a year earlier to $ 9.1 billion, despite economic uncertainty and market instability.

He also mentioned the diversification of the company in many business lines as a source of strength.

“We are investing in basic technologies and we are in many areas. So, in a sense, we are diversified. Obviously we have important products like search and YouTube. We have computer products including Android, Play and our hardware devices. And the cloud is a big area of ​​opportunity for us. So I think we are exposed to many, many sectors. And we do that globally as a company. And I think that allows us to look at the long term and think about those phases. “

Sundar Pichai, CEO of Alphabet and Google, interviewed by Deirdre Boza of CNBC.

Source: CNBC

Google kicked off its conference on Wednesday by announcing new smartphones and annoying augmented reality glasses that use artificial intelligence to translate spoken words into on-screen text. The parent of Facebook Meta and Microsoft are also working on AR devices.

Google needs to spend to keep up with competitors in a fast-growing market, especially with the advent of the TikTok short video service, which is extremely popular with younger users. Google’s response to TikTok, YouTube Shorts, is growing rapidly, attracting more than 30 billion daily views at the end of April, up from 15 billion in January.

“We have to respond to what consumers want,” Pichai said. “We try to give them the best experience and that’s why we feel challenged to do better.”

He also stressed “things like Snapchat, Pinterest – all this did not exist a few years ago” and said that smartphones and the mobile ecosystem are creating all sorts of new opportunities.

“We always have to be agile and we have to adapt, and that’s how I feel every Monday when I come to work,” he said.

The question of freedom of speech

He also drew attention to the balance between freedom of speech and the moderation of content on the Internet, which was subjected to new attention recently with Elon Musk’s planned acquisition of Twitter.

“I grew up in a great democracy and the importance of freedom of speech and giving people a voice is really fundamental,” said Pichai, who was born in India. “Demand is what we have online today. We only remove things that are against the law. “

He added: “In a product like YouTube, where we recommend and where we can expand content, we have community guidelines. So we have clearly defined policies. And we take action. And that actually allows us to maximize freedom of speech, [to] help keep the platform safe for everyone involved. “

He also says little about the company’s approach to content moderation. “I think it’s important to give people a sense of transparency. And there are many ways to achieve this. For example, we publish our community guidelines, or in the case of search, how our evaluators evaluate the quality of the search, we publish it publicly. “He added:” I think it’s important to do it the way spammers and others who trying to bypass your products are unable to do so.

As for Musk’s plans for Twitter, he said: “I’m an avid Twitter user. I think this is an extremely important product for the world. I got a lot from him. And I think there is value in investing in it in the long run … I think it’s important because it plays an important role in a democratic society … I would like to see the product continue to improve. “

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https://www.cnbc.com/2022/05/12/alphabet-ceo-sundar-pichai-cnbc-interview.html