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00:00OK so you built this. So this is all this is new since the pandemic. We assume Googlers would want more indoor outdoor options. I mean it's so exciting. It's such a fun job. It is. It is. But I would say the thing we're really excited about are these new buildings because we were building sustainability into everything we do. So really forward looking good. OK. From one of the newest workspaces at the Google Plex in Mountain View California. This is Bloomberg Studio 1.0 with Alphabet CFO Ruth Porat. We're not far from her childhood home. Her father was a physicist at Stanford. Her mother a psychologist. After graduating from Stanford herself and then earning a couple more advanced degrees Porat landed her first job on Wall Street in 1987 where she would spend almost three decades until Google's co-founders lured her to Silicon Valley. Ruth, it's wonderful to be here with you. It's great to have you here at the Google. Thank you for having us. So we are at Google headquarters in Mountain View. And at this very same time you are making massive investments in New York office real estate. You're expanding headcount in Atlanta and Chicago and Washington D.C.. What's the strategy behind all of this. Well at the core we believe in hybrid work. So we do want to bring people back on campuses but not full time. We're thinking of probably a three to work week but we think coming together is just such a core part of innovation serendipity culture every element of it. And we're growing at a really rapid clip. So we are excited to be expanding our real estate footprint. And then we also wanted to make sure that we're meeting people where they want to be. And so enlarging the number of sites that we have available for people in particular sites where you have great diverse populations. Sundar just told me that Google will have this option to work in a hybrid mode forever literally forever. Obviously you're embracing this massive cultural shift but what are the risks. What do you worry about. So the positive we've seen is there is a productivity uplift. We believe in giving people the opportunity to be at home some of the time not do the commute be able to deal with everything else in their life and coming into the office. So the risk is I think about my career and so much of the benefit in my career was the informal coaching being part brought into meetings all of the touch points that you have. And so I think that one of the most important things for all of us as leaders is we need to evolve the way we lead. We need to make sure that we're thinking about this hybrid work life and why that's the way to be the best magnet for talent and make sure that we're continuing to reinforce all of those great practices while opening up new great practices. Speaking of your career before you were CFO of Alphabet you were CFO of Morgan Stanley and you started your career on Wall Street in 1987. Talk to us about the journey of going from big banks to big tech. Why did you make that leap and what impact did you want to have. Well I love being at work and Stanley and I became CFO the day James Gorman became CEO he asked me to join him in that in that journey. And that was January 2010. And we were still recovering coming out of the financial crisis. There were still some pretty rocky days and a lot of decisions that needed to be made. And then I got to a point where I felt like we were in a great spot at Morgan Stanley. And obviously it's continued to do really well. And I just wanted that next chapter on my view in my career. I've always been focused on continually learning. And I feel like when you hit a plateau the right questions what's my highest and best use. And it's been it's been an extraordinary time. You also survived Wall Street and the 80s and 90s which is Notorious Boys Club and Silicon Valley has sort of come to be known as a boring boys club of its own. How would you compare those two cultures. Well when I was starting my career many decades ago it was much it it was tough and much worse than it is now. And it evolved. No question about it. Not where it needs to be but certainly evolved. And I saw it through my career. I would say the biggest difference out here is the level of impatience. And I love it. It's the view as if you can do some of the extraordinary breakthroughs that we have out here. If you can do natural language translation everything we do with A.I. with VR with self-driving cars why can't you fix this now. And that level of impatience I think is fantastic. Legend has it that when you got to Google you are going to rein in the spending tighten up on the moon shots. Your nickname I believe was Ruth Vader. Was that a tough job to take on. So I think the narrative was written before I got here. And what I find most interesting about that is I firmly believe the single most important thing in capital allocation is investing for long term growth. I think if you don't you are sowing the seeds of your long term decline. And I learned that really early on in my career. Now if you're investing in an industry like this and trying to do truly transformative things by definition everything can't succeed. And so by definition you should have the metrics and data and milestones to assess. Is it working or is it not. Because if everything's working or if you think everything's working I would say one or two things are wrong. Either you're not reaching high enough or you're not being honest enough with yourself about the pace of breakthrough whether you're going to get there. So to me a really natural part you know kind of a sister organization to investing for long term growth is actually thinking about how are you doing with the risk that you're taking stack rack them and figure out what's at the bottom so you can redeploy those resources to the top. They go together actually. And so I find the narrative it's a false choice to think that it's either about growth or it's about pruning stack ranking. They go together and you have to think of them as actually empowering one another. You advised the Treasury Department during the Great Recession. What lessons did you take away from that. What struck me is a lot of the lessons from the financial crisis are relevant in good times and bad times. So the most important is it's easier to prevent than to fix. And and so you know there was that was really clear during the financial crisis. The financial crisis was about liquidity and it dried up quickly. And it would have been really easy six to 12 months prior to build in durable liquidity. You couldn't do it in the moment. And so this notion about really building a solid foundation on which you operate you need to do that ahead of time. It needs to be all of the work we do on trust and safety and content moderation security that is the foundation on which you can build everything else. Hank Paulson at one point said to me you have to have the will and the means. And too often by the time you have the will you no longer have the means. His comment was be decisive act early even in the absence of information. I think that's true in this whole notion of investing for long term growth because if you're not actually assessing progress along the way and you just assume you know we can keep investing in everything at some point down the road you'll say I wish I had made those tough calls to double down on the things that really matter. What times are we in now. What's your read on the economy today especially with rising inflation. Well I look I think back to March of 2020 and where we were and I think of all of the intervention and steps that have been taken since then. And you've certainly seen the recovery coming out the back end. And it's been really gratifying from those of those painful days to see that the breakthroughs that we've had not just on the medical front but we've also seen the improvement across businesses. I think one of the biggest concerns in particular is you're seeing us go through a digital transformation and the acceleration of it is ensuring that everyone has the skills the digital training and skills to thrive in this new economy. Google now reaches more than half the people on the planet. Why shouldn't we. Google has a monopoly. We often say that people come to Google not because they have to but because they want to. It's really opening the world for so many people. So that's that's the intent. I want to talk a little bit about regulation. You were drawn to emanate in your early days at Morgan Stanley. Microsoft is making some big acquisitions deals that some think Google maybe would have wanted to win in a former life. Is antitrust scrutiny constraining any of your business plans and your ability to compete. So the main thing that we've done throughout the life of Google is really invest in innovation. It's organic growth. And we're continuing to do that at a really rapid clip. We have then layered onto it. Tuck in acquisitions and larger acquisitions and we're continuing to be active more on the smaller ones in the add ons. To be fair but we think there's a lot of opportunity still ahead of us. And so we're continuing to invest in partnerships in some acquisitions. And do think that there's there's still upside in a lot of different areas. So would you say there's regulatory scrutiny isn't slowing you down. That's really important for those of us in certain leadership positions to be very focused on constructively engaging and working with regulators on what are the issues. What is it they're trying to solve and how can we constructively engage with them at the same time. Our engineers should focus on innovation and continuing to kind of up the bar on everything we're doing address what is most helpful for our users. Google is facing more serious legal threats at this time in the United States than the other big tech companies. How are those conversations with regulators going. Are they frustrating at this point. Well there are certain elements that are frustrating because I listen to the outline of some of the proposed legislation and I think it's inconsistent with some of the priorities for public policy. So as an example there are arms. There's a lot of focus on what what is called self preference thing. Are you putting too many of your own products together. But during the pandemic one in three small businesses said they would have failed without digital skills. Why. Because what they were able to do is connect with their users in different ways. So if you go search for a small business you can then go to a map and you can get directed to the small business. That's a good thing. We have 6000 small businesses who wrote in and said you know what we need these digital tools and skills. Same with a number of things on racial equity a real surge in searches about where can I where's a black owned business near me. And the ability to direct people through search and maps. So I think that what's really important and that's why I said it's about constructive engagement. Let's make sure we understand what they're trying to solve and work with them on what is it that we're trying to address through products so that the products are helpful in the ways that they want. Facebook has taken a serious reputational hit. Has that had ripple effects or created collateral damage for Google. Well I think that whenever there is a backdrop that's that's challenging. It has ripple effects. But what we're really underscoring is all of the steps and investments that we are making to really protect the ecosystem the way we our commitment to our users. So we know how sacrosanct that trust is. And it's all about privacy and what are the steps that we're taking to make privacy protected for our users. What is it that we're looking at to protect content and content. Moderation. Google now reaches more than half of people on the planet. Why shouldn't we view Google as a monopoly. So you know I go back to the earliest days when Google I first learned about Google back in 1998 and in those earliest days when I heard about this like eight search engine the question is why do you actually need it. And back at Morgan Stanley it's working with our research analyst Mary Meeker. She actually had her team put up white pages all around the conference room and was doing this comparison. Well provided the most responsive results most rapidly. And all of a sudden you could see a windmill. This Google thing actually maybe we do need something new. And that's been the ethos at Google since inception is just continue to innovate to make this eight and ever better experience for users. And so if we can if we can deliver on that which is what drives people here it's really opening the world for for so many people. So that's that's the intent. Facebook and Twitter are exploring digital currency. What is your thought on the crypto market and is there a place for Google. So we look at it. There's nothing to comment on. Now I think we're much more interested in block chain and the underlying technology and the implications for the business and also for the way we can support our cloud customers. So certainly a lot of effort there. There's considerable chatter in the crypto universe that Web 3 and the block chain could circumvent the power of Facebook and Google and more. What do you think about the next frontier of the Internet at this point. I think there are a lot of different things ahead of us that are actually stunningly exciting that enable us to actually continue to address different needs and requirements. Like I look at for example in something like health where I think block chain will be very valuable. When you think about health and health records there are also a whole host of other areas where the data analytics that we provide are absolutely critical. Should we make excuses to our employees. Should we tell him like if I have to head to a parent teacher conference or take a kid to the doctor. Do I tell my boss that you don't tell your boss. You've got gotta get over the guilt. You survived breast cancer twice. What was your biggest fear at that time and how did you overcome it. Well the biggest fear was I wouldn't make it. And I remember when some someone at some interview all I was going through chemo said where do you want to be in five years. And I froze. So it was. I want to be alive. And I learned a couple of really important things. One given breakthroughs in medical technology. I learned to love the word manageable. These this journey does become manageable. Not for all cancers but for many more cancers. And that gave me a lot of confidence. Talking with other survivors about it is manageable. Get the best care and just plow through it. I was just very grateful and grateful for all of the investments people have made over the years. But for anybody out there and I think everybody sadly will be touched by cancer either themselves or someone they know and love. Many of these cancers are manageable and just go at it with gusto. So that's what I did. You're a mom of three sons and I find that especially remarkable because I also have three sons. How have you managed that over the course of this incredible career. How do you find that right mix of focus and free time to spend time with your family and doing the things that you love. So my kids my kids give me energy. They're remarkable. And I think one of the important things for me is this notion that you do have to have a mix. It's not about trying to find balance. The physics of which is really challenging. I think when people try for balance they always feel they're failing on something because something's out of whack. So this metaphor for that life is like a kaleidoscope and you need to have different shaped pieces of glass and different color and sometimes one is larger than the other. And what's beautiful about life is when it's constantly moving around. And so to me that metaphor has actually been sort of an anchoring principle. The other is you have to put the kids first. So like they they know that I'm I'm there when they need always. And. And I think that just making sure that you're setting the boundaries the way you need to. I would say it's much easier today than when I was growing up in banking. You know we had a cubicle. There was a there was a computer room. You were anchored to the computer room. One of the many beautiful things about going through this evolution in work is understanding that hybrid works. So how do we get rid of mom guilt especially in this new work world. I want to shake my mom guilt. How do I do. OK. So even when you feel it to say you know what. It's an investment in my career because I can stay in this longer and be operating at a higher level if I'm really getting the stimulus from all parts of my life. So you've got to drop the mom guilt. And when on the other side mom guilt with kids I think they get it. I think they understand what we're doing. And you know I'll never forget during the financial crisis at one point I was working on AIG. We went around the clock. I came home to shower that one like right as we were landing AIG. And my three kids had each written me a yellow sticky note with a message on it. And one of them was. You know the essence of which was I get why you're doing this. And they saw it as. The right thing for the country I don't mean to overdramatize what it was but that's what it felt like at the time. And that level of pride. I still have those three stickies right by my bedside because I get it. I get the mom guilt. I wish there were certain elements I could could have done differently. But I also see the relationship we have and they understand what it means to actually be engaged in society and doing something you care about. No. Mom. Mom. Thank you. It's not allowed. Should we make excuses to our employees. Should we tell her like if I have to head to a parent teacher conference or take a kid to the doctor. Do I tell my boss you don't tell your boss. You don't tell your boss. Guys don't tell their boss. So what. So I don't think you say anything. I actually made this point at an event at Morgan Stanley. I'm like do not tell your boss. You've got to get over the guilt. The only way to move on from it is realize I'm a professional. I do things when I when I can. And it makes sense. And I get it all done. I just do it on my own timeline. And I actually had a woman who emailed me afterwards and said I know you said I'm not supposed to tell my boss so I won't but I can't not tell somebody. So I'm gonna email you. Okay that's step 1 5 step journey. Do not tell your boss or tell your boss. You know what. I need to do certain things for myself. And I it's I'm getting I feel guilty doing it. I get everything done. There's no question you are so beyond having to check in with people. Well thank you. Not. We're in the middle of this so-called great resignation. And people are reflecting and changing and making big decisions. What's your advice to people in this big evolution. You know huge choices ahead. Well I think you framed it really well. I don't think it's the great resignation. I think it's the great reshuffle. And people are reflecting on what do they want. And how do they want to work and how do they want to live their life. So I think for all of us thinking about what does that mean for our institutions. It is about evolving the way we leave. We work the way we interact the expectations that we have to say. But I grew up in a cubicle on the twenty sixth floor of a sky. Rice doesn't work anymore. And so what should we do as leaders. And I think that are this generation appropriately and it's very exciting expects more from all of us. And so it's not just in how we work but it is in what we do. And I think all elements of what's the mission. Are you delivering on the mission is really important. OK so see you. Rapid fire questions. Someone you'd love to have dinner with. Well I'd love to see my parents because they've passed away a number of years ago. Favorite family ritual. We do this crazy thing that we've done for years which is everybody gets to pick where we travel. We come up with the five five different locations and then we all vote and then we get the grid and that's where we go. What's your favorite getaway. Only I could see maybe Iceland was the best. That's an amazing one. New York or California. It's so unfair. Well sitting here outdoors right now and knowing I can do that for the rest of the year is very nice. With the energy from New York. So I'm not going to. It's like we don't pick amongst children. So in closing. Google's a massive company multiple divisions many bets. Where are you spending most of your time now. I'm spending most of my time on your very morning question about capital allocation because if it really goes to this core point you've got to invest for long term growth and making sure that you're investing with the right intensity. I often say I don't want to get to the 2 yard line but not score. So you need to make sure you're investing with the right intensity to support long term growth. That's the most important area where I would say I spend the bulk of my time. And then of course you have to prioritize in order to recycle to support those. What kind of discussions are you having with Larry and Sergei now about this next phase of Google. So when they made the announcement about the role change they really they were very serious about moving to this board role and they've been their amazing board members. Sundance of course relies on them for council wherever whenever. But most of the interaction is really around. What are we doing at the board level. Great. And you have your freedom to allocate capital as you like. I work closely with Sundar and Philip and Tom. Yes we we work as a great team. So what's the vision for Google then 10 years from now. You know it's fascinating to watch was I think I had the same reaction you did when I heard Sunder say searches the biggest moon shot. And I think that continuing to find ways to be helpful to users to solve what they need where so many people are coming online and it is video going to be the first. The way they understand it's going to be about you know search is going to be a different type of experience. So much of it's going to be about voice first and language translation. So there's going to it's going to continue to evolve. And what about for you personally. Like what. Where. Well you know it's been so amazing to hear about your journey. And I'm just curious about your personal growth what you feel you've accomplished in the last you know since you've been here and what you hope to accomplish. I find that the. Opportunity to try new things and to invest in new things and as we think about well what does that mean for each one of our areas. There's I think that intellectual curiosity keeps you young. And I think that continuing to learn is like your brain. It's like silly putty getting pulled in a lot of directions. So to me it's continuous learning report. Thank you so much for joining us. It's been wonderful. Great to have you. Come back anytime.

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Bloomberg Studio 1.0: Alphabet CFO Ruth Porat

On the latest episode of "Bloomberg Studio 1.0," Emily Chang speaks with Ruth Porat, senior vice president and chief financial officer of Alphabet and Google, about Google's hybrid work model, antitrust scrutiny, investing for the future, and managing work life balance.