Alphabet gains $1.3 trillion in value since Sundar Pichai became Google CEO
The pandemic lockdown was a big boost to numerous digital businesses, including Google. Revenues of Alphabet, the parent company of Google, rose 62% to $62 billion in the second quarter ending June 2021, compared to the year earlier quarter, the company announced today. Operating income more than tripled to $19.4 billion, giving the company an operating profit margin of 31%.
In the second quarter, “there was a rising tide of online activity in many parts of the world…Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone’s digital experience,” chief executive Sundar Pichai, 49-years-old, said in a statement.
Google’s products and platforms include Search - with more than five billion searches a day - Maps, Ads, Gmail, Android, Chrome, Google Cloud and YouTube. With its head office in Mountain View, California, it has more than 100,000 employees worldwide.
Google was founded in 1998 by Larry Page and Sergey Brin, who met while studying at Stanford University. It generates 99% of Alphabet’s revenues. Online advertising accounts for 85% of Google’s revenues.
In 2020, Alphabet had $184 billion in revenues and $41 billion in operating income. It has a market value of $1.8 trillion.
Since August 2015, when Sundar Pichai took over as CEO of Google, Alphabet’s stock has risen about 400%, a gain of more than $1.3 trillion in its market value. In 2019, he was also appointed as the CEO of the parent company Alphabet.
Alphabet’s other businesses are what the company’s founders and Pichai call “moonshot investments” which bet on achieving major technological breakthroughs: Verily which seeks to improve health care services; Google Fiber offers faster Internet access to homes; Waymo’s self-driving cars; and more.
These businesses have little or no revenues and lose money. “We try to work on things people will use everyday, it will apply to billions of people and solve a real problem for them,” Pichai told students at the Indian Institute of Technology (IIT) Kharagpur, during a visit to India in 2017. Even if you fail while pursuing ambitious projects, Pichai added, the work done often leads to gains in existing and new businesses.
In 2020, Pichai earned $7.4 million in salary and other compensation. He owns Alphabet stock, which he got as grants and options, worth nearly $500 million. He has also sold Google stock worth millions of dollars.
Pichai joined Google in 2004 and helped lead the development of Google Toolbar and then Google Chrome, which grew to become the world’s most popular internet browser. In 2014, he was appointed to lead product and engineering for all of Google’s products and platforms - including Search, Maps, Play, Android, Chrome, Gmail and G Suite.
Under Pichai, Google has expanded its cloud business, which is run by a fellow Indian American Thomas Kurian. The company is developing products and services, powered by the latest advances in artificial intelligence and machine learning. It is also investing in quantum computing.
Google’s search business, currently its largest revenue and profit generator, faces a potential threat from Neeva. The appeal of Neeva, which is a paid platform, is that it protects a user’s privacy. Also, it does not sell advertisements, which leads to more useful search results, Neeva says.
Neeva was launched in 2020 by Sridhar Ramaswamy, the former head of advertising and commerce at Google, and Vivek Raghunathan, a former head of engineering at Google’s YouTube. Ramaswamy is a graduate of IIT, Madras, while Raghunathan is a graduate of IIT, Bombay.
Prior to joining Google in 2004, Pichai worked in engineering and product management at Applied Materials, a semiconductor company, and in management consulting at McKinsey & Company.
He holds a Bachelor’s degree with honors in metallurgical engineering from IIT Kharagpur, 1993. While at IIT, he learned computer programming on his own, including in the now obsolete Fortran language. On the campus, he met Anjali, a fellow student and his future wife. Pichai earned a Master of Science degree in materials science and engineering from Stanford University, 1995; and an MBA from The Wharton School of the University of Pennsylvania, 2002. Flying to the U.S. to study at Stanford was Pichai’s first airplane flight.
Pichai Sundararajan grew up in Chennai, India. He and his brother slept in the living room of his family’s cramped home. Their father, an electrical engineer with the British company GEC, focused on giving his children a good education.
As a kid, Pichai dreamt of being a professional cricketer. In 2017, while playing the game during a visit to the IIT Kharagpur campus, he was bowled out on the first ball. But he continued to bat and hit the next ball well.
Though interested in technology as a kid, his family got their first landline phone when he was ten. In 1989, he saw his first computer when he got to the IIT campus. He had regular access to a computer only in 1993, when he came to America to study at Stanford. “I always looked to do something I liked doing…I wanted to build computing products which could reach many, many users,” Pichai told students at IIT Kharagpur in 2017.
In a virtual commencement speech in 2020, Pichai told the graduating students locked down by the pandemic, to be open, impatient and hopeful. “The long arc of history tells us there is every reason to be hopeful. So be hopeful.”
Editorial Comment: Are Indian Professionals in the U.S. proud of a minority label
Employers in America, including government agencies, colleges, hospitals, technology companies and large corporations, hire Indians to show their commitment towards meeting minority and diversity goals, including for senior management roles.
The term “minority” in this context is not a statistical measure. It is applied to various groups who hold few or no positions of power in a given society.
But the employers ignore that, unlike Blacks and Hispanics, Indians do not qualify as minorities. Indian professionals in the U.S. are almost all from middle-or-upper class families, who were educated at good schools and colleges in India and the U.S. Also, except for descendants of Sikh farmers who migrated to the U.S. in the early 20th century, none of them suffered any historical discrimination and economic hardships in America.
The original goal for including Asians among minorities was to help uplift the historically disadvantaged people from Hawaii, Guam, Samoa and other U.S. jurisdictions in Asia and the Pacific, descendants of nineteenth century Chinese railroad workers and Japanese Americans in internment camps during World War Two.
Indian professionals face rising criticism for taking jobs, from some minorities, White Americans as well as conservative and right-wing politicians.
In this environment, Indian professionals should tell their employers to exclude them from lists they compile to show their commitment to diversity hiring. This will ensure that the employers hire Blacks, Hispanics, Native Americans and other minorities, who legitimately qualify.
Also, it is in the self-interest of Indian professionals to clearly establish that their hiring was based on merit. Otherwise, their professional achievements will be doubted for the rest of their career, even as they are burdened with the label of being hired to fill minority quotas. This experience would be similar to that of minorities who meet the intent of diversity hiring. There is an underlying and often unfounded assumption among some of the other employees that such minority hires do not possess the requisite qualifications and skills.
Most Indian professionals in America – from chief executives Sundar Pichai at Google, Satya Nadella at Microsoft, Anjali Sud at Vimeo and Sonia Syngal at Gap; Ajit Jain, vice chairman at Berkshire Hathaway; Srikant Datar, dean of the Harvard Business School; Vanita Gupta, Associate U.S. Attorney General; and on down – deserve their success given their educational credentials, training and skills. So, it should be unsettling for them to be counted and represented as evidence of ethnically diverse “minority” hiring.
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