‘Grandpa Google’: Search head testifies that young users see it as out of style
Prabhakar Raghavan, of Google Inc., speaks during the company’s Cloud Next ’18 event in San Francisco, California, July 24, 2018.
David Paul Morris | Bloomberg | Getty Images
As Google fights claims that it violated antitrust law to maintain its online search dominance, the company’s search lead testified Thursday that young users mock Google as old-fashioned.
Prabhakar Raghavan, a Google senior vice president responsible for for products including search, ads and commerce, said that some young users have referred to the search engine as “Grandpa Google.”
He explained that the term refers to the idea that while Google might be fine to ask a question about homework, young users would prefer to take their more interesting queries elsewhere.
It’s not entirely clear where Raghavan saw the term. Searching “Grandpa Google” on social media sites like TikTok yields videos and memes of grandparents searching for information.
The comment is indicative of a key theme of Raghavan’s testimony, which marked the official first day of Google’s presentation of its defense against claims from the Department of Justice and a group of state attorneys general that it violated antitrust law. The government spent over a month presenting its case alleging that Google illegally leveraged its dominance to maintain its monopoly in search. It’s defined Google’s competitors in search as a handful of much smaller general search engines like Microsoft’s Bing or DuckDuckGo.
But Raghavan testified that threats to Google’s position are very much real and extend far beyond competitors that closely mirror its functions. He said that innovation in the search engine is what has allowed it to maintain market share.
Raghavan testified that Yahoo’s search dominance at one point seemed insurmountable. But, he said, Google was eventually able to surpass Yahoo through better ranking as well as innovations in the search product. For example, Google has conducted research that’s led to features that let it directly answer users’ questions, understand voice queries and lens queries, where users search via a photo they take.
Now that most consumers have a smartphone, users often conduct searches within their own apps, Raghavan said. He gave the example of booking a vacation, where users might use a variety of apps to book their flights and amenities.
“We don’t see users carrying through these journeys entirely on Google,” Raghavan testified. “They go in and out and spend a lot of time on these other platforms.”
When it comes to specialized vertical search engines, such as Yelp or Expedia, Raghavan said, “I see myself as competing with them every day.”
Commercial search is also important to Google, Raghavan said. Amazon is one of the companies that he said he closely watches.
“For Google to be a successful company, we should be good at answering any kind of query, including commercial queries,” Raghavan said. “I believe that if we become second class … we become irrelevant over time.”
The X logo appears on a phone, and the xAI logo is displayed on a laptop in Krakow, Poland, on April 1, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Elon Musk‘s xAI Holdings is in discussions with investors to raise about $20 billion, Bloomberg News reported Friday, citing people familiar with the matter.
The funding would value the company at over $120 billion, according to the report.
Musk was looking to assign “proper value” to xAI, sources told CNBC’s David Faber earlier this month. The remarks were made during a call with xAI investors, sources familiar with the matter told Faber. The Tesla CEO at that time didn’t explicitly mention any upcoming funding round, but the sources suggested xAI was preparing for a substantial capital raise in the near future.
The funding amount could be more than $20 billion as the exact figure had not been decided, the Bloomberg report added.
Artificial intelligence startup xAI didn’t immediately respond to a CNBC request for comment outside of U.S. business hours.
The AI firm last month acquired X in an all-stock deal that valued xAI at $80 billion and the social media platform at $33 billion.
“xAI and X’s futures are intertwined. Today, we officially take the step to combine the data, models, compute, distribution and talent,” Musk said on X, announcing the deal. “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.”
Read the full Bloomberg story here.
— CNBC’s Samantha Subin contributed to this report.
Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.
“GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”
The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.
Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.
Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.
Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.
During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.
Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.
Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.
Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.
“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.
WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard
CNBC’s Jennifer Elias contributed to this report.
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