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Google has built a massive business selling ads that appear around search results: In its 2024 10-K filing with the Securities and Exchange Commission, the company reported roughly $198 billion under Google Search & Other, its largest profit segment and more than half of its parent company Alphabets total revenue. But search is undergoing a foundational shift toward accessing the webs information with the help of powerful AI models, and nobody has yet found a winning model for placing ads around AI search results. At the same time, new generative AI models can now handle much of the cognitive efforts users typically expend to arrive at their intended web contentand theyre doing it faster. This shift was evident in the search products and features that Google unveiled at this weeks I/O developer event, many of which are powered by this very reasoning capability. Fast Company spoke to Liz Reid, Googles head of search, and Nick Fox, SVP of knowledge and information product, about how the company is navigating this seismic shift. This interview has been edited for length and clarity. How are you thinking about where search is heading? Nick Fox: What [AI] means for search is probably the biggest shift in search ever. We’re talking about a shift from basic information retrieval to intelligence. These models enable a much deeper understanding of information [and] the ability to transform information. If we rewind a year, some of this was just theory. Liz Reid: One of the exciting things with AI Mode is that while it’s our cutting-edge AI search, it also provides a glimpse of what we think can be more broadly available. Our current belief is that we will take the things that work well in AI Mode and bring them right to the core of search and AI Overviews. We’ve started doing this with technology like query fan-out [in which the AI calls for a number of sources for information related to the users search], so you can just ask whatever question you have right in the search box. When we think about the future of search, we consider a few different areas: AI could be the most powerful engine for discovery because the ability for you to specify what you want means we can connect you to that really interesting niche page or artist that has something different to say that you’re interested in. We think it can end up transforming the web and people’s ability to connect. LLM technology allows multimodality both in inputs and in outputs. Humans speak in different waysconversationally, looking at images, seeing things before us. This is how we like to talk, describe our needs, and understand. AI allows you to say how you would really like to consume this information and makes that possible. What does the introduction of reason agents mean for search? LR: [Google] has been thinking about agentic work for a while [but] oftentimes that’s been confined by API integrations. The goal is to make search gather information, pull it together, and make it easy for you to take action on your information needs. This will be really exciting. We’re starting with bringing a lot of the Project Mariner (AI agent) technologies into search. This was something that was once easy to talk about, but now it feels like it’s actually going to be possible. This is related to the new reasoning aspect of LLMs and the tool calling ability to do tasks as opposed to just searching for a static piece of information. Thinking about traditional search with the 10 blue links, my brain was doing the work to figure out which link to click and to process all the information. It seems like with the new AI approach, AI is doing some of that mental work for me. NF: While a lot of the narrative out there is “AI or the web, we don’t view it as AI or the web, but rather the two of those really in concert together, building a holistic experience. A big part of that is exactly what you said, which is AI can help contextualize the web. AI can help organize, contextualize, and bring some of the simpler parts, and then you’re going to go deeper, often in a web page. Robby Stein, VP of search products, mentioned giving AI Mode permission to look into search history, Gmail, and other Google services to personalize search results. What are the privacy concerns about accessing that kind of data? LR: A key part of this is that it is genuinely an opt-in thing; we really want people to actively decide that they want to do it. We’re really starting with business messaging and recommendations. It’s not about personalizing something like a health response based on email content, but using information like the type of brands you like to shop for to make shopping queries easier, or the type of restaurants you order takeout from to recommend places in a new country. We’re going to start in Labs (for experimental products) to see what the feedback is and focus on recommendation spaces where there’s an overwhelming number of choices and it can be hard to express what you want, to specify your taste. NF: My own usage has been super useful for recommendations, especially restaurant recommendations based on OpenTable confirmations in Gmail. Search understands some of this already, but the notion of which restaurant I actually liked is a particularly useful piece of information. LR: Our UX research shows people have very different views. Some people really don’t want it, which supports the opt-in. But a lot of younger users actually expect apps to be very personalized, and they assume we’re already doing a lot of personalization in search. For some users, we’re not meeting their expectations in that space, and we should do more. Others may just never want it, and that’s fine. It’s like you have to get a sense of the zeitgeist around privacy expectations, and it’s a generational thing. I always think of it in a transactional way: I would be happy to expose my information if the return was obvious, and if you earn and keep my trust, and don’t start doing something with my data that I didn’t know you were going to do. NF: Yes, the user value of it has to be really high. We believe it can be and will be, but this is what we’ll learn with our users. It must be rooted in whether there is truly compelling user value by getting highly personalized, highly relevant recommendations for the things people are really looking for. You built this huge business on showing search ads to people, and now we’re talking about this foundational shift in the way we’re doing search. Has your thinking around how you’re going to monetize AI search evolved as you’ve learned more about what it is and how people use it? LR: We still see that a critical class of information is commercial information, where people are still often making [product] choices. So there’s still a large opportunity for ads. AI is expanding what’s possible. People are asking more queries, sometimes more specific queries. They’re telling more about what the intent is, which allows us to do more useful ads; you’re not just guessing, you can get more explicit. That is a real opportunity [for Google] from a buiness perspective, with more various opportunities. It’s also really important for [businesses] that there are these opportunities for ads. If you’re a small merchant, often the only way you have a chance to break out is with ads. Otherwise, you just cement the brands everybody knows. That is how new brands come in and new merchants stand out, advertising to people looking for something they don’t know by name. If people get more specific about what they want, it gives more space for small merchants to show up and meet niche needs. NF: What I’d add is the hallmark of our approach to advertising and search has been showing ads when they’re relevant and highly useful for the user, and showing very few or no ads when they aren’t relevant or the query wouldn’t benefit. I’m looking for a Mother’s Day present or gift ideas, which can be tricky. Having an AI response that gives ideas, and then ads that provide specific places to go buy them, is highly useful. Because we have a baseline understanding of how to monetize and thoughtfully display ads or not display ads on a search results page, it gives us the ability to get this right and what the user is looking for while also creating the opportunity for advertisers and driving the business forward. Have you been talking to brands? Are they looking at this new mode of discovery and thinking about what they need to be doing to optimize for visibility and searchability in AI search? NF: The ecosystem is figuring it out; we’re all figuring this out together. Historically, it’s all been about clickssomeone searches, do I get a click? That’s going to continue to be important for conversions. But there’s an additional piece: Brands themselves want visibility in that experience even if they’re not the place the user is going to go to buy. There’s value to the impression or the mention, which is something search hasn’t focused on as much historically. This is something we’re going to be talking to advertisers and businesses about. Its interesting that the total number of searches is increasing with the introduction of AI search. NF: Theres been this narrative out there that the web is dying for 25 years or something. Whats interesting is that if you actually look at the data, the web is thriving. We were looking at data recently, and Google’s crawler, which crawls a lot of the web, is seeing way more content than ever before. Our crawlers are seeing 45% more content this yearin April versus April two years ago. More content is being created, more domains are being registered, and third-party data shows visits to the web increasing over time. Liz talked about AI being an engine of discovery; discovery also leads to creation. Google is an optimistic company that cares a lot about the web. We truly believe this will be an expansionary moment for the internet and the web, and the data seems to indicate this reality. Maybe you’re just making it a little bit more fun to search, more fun to shop. LR: It’s certainly the case that if you reduce the drudgery and the effort, people search more. People have limited time, and if it’s just easier to do, if it feels like a joy and you don’t have to do the hard parts but get to do the fun parts, then people will do it more often. We’ve seen this repeatedly, from the web overall to images, Lens, and AI Overviews. Lower the difficulty, make it more enjoyable with the response you get, and then people just do more of it because it’s worth their time.
Category:
E-Commerce
Welcome to Pressing Questions, Fast Companys workplace advice column. Every week, deputy editor Kathleen Davis, host of The New Way We Work podcast, will answer your biggest and most pressing workplace questions. Q: What should I do if my coworker is using AI unethically?A: This is a question that feels new but is actually just an evolution of a classic workplace issue. You can slot any number of issues in the place of AI and the problem is essentially the same: Whats the best way to handle misconduct at work?The answer for all situations, including this one, comes down to a few factors:1. Do you know (or just suspect) your coworker is doing something they shouldnt?2. Does the misconduct violate company policy or is it something you just dont agree with? 3. How severe is the misconduct? And is it a pattern or a one-off?4. What is your relationship with the coworker? Lets take this scenario through those checkpoints. Are they actually doing something wrong? The use of AI at work can be a contentious topic. Your first step should be to check your companys AI policy and make sure that the way you suspect your colleague to be using AI is actually in violation of the policy.Typically companies have varying degrees of comfort around using AI for workflow and administrative tasks, including email, scheduling, and note-taking. If your company is okay with AI use for these purposes, there might also be a clause that the use of AI tools needs to be disclosed (for example: letting meeting participants know that you are using an AI notetaker).Companies should also have guidance on using AI to complete the work itself (like in written reports or presentations, creating images, etc.). Again, at the very least, the policy should ask that employees credit and acknowledge work that was created by or with the help of AI.If your company doesnt have an AI policy or its too vague, your first stop should be with company leadership to suggest the need for clearer guidelines. While your coworker should have basic ethics and know better than to submit work thats false or fabricated or pass off AI work as their own, they cant be blamed for violating a policy that doesnt exist. How severe is it? Assuming the AI use is in violation of company policy, there are a couple of approaches depending on how severe it is and your relationship with your coworker. Using AI to help write email responses is a lot different than passing off work that you didnt create or outsourcing quotes and data to AI without fact-checking. If its a workflow process that you dont agree with but that comes down to a personal preference, you can either bring it up directly with your coworker or go to their manager. As long as you feel comfortable and have a good relationship, going directly to the person should be your first step. Assume good intentions. Say something like I noticed you are using AI notetakers for our weekly staff meeting. I think thats against our AI policy because of privacy concerns. You might want to check with John about it and see if we can have an intern take notes instead.If you suspect someone is passing off AI work as their own, or submitting work with AI-produced errors, its more of a delicate situation. If you arent the persons boss, its not for you to litigate, but before you make a potentially career-damaging accusation, do a little fact-checking. If you have proof that the work is in violation of company policy, take it to their manager, express your concerns, and let them take it from there. If you are in a leadership position and you are sure that an employees work is unethical or contains false information, confront the employee with proof. The degree of the deception should dictate whether the employee can be trusted again after a warning or if its a fireable offense. More on AI at work: Nearly half of workers using AI at work admit to doing so inappropriately How to learn to work with your new AI coworker Bots, agents, and digital workers: AI is changing the very definition of work
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E-Commerce
On a recent weekend in April, data consultant Shane Kessler wasnt at the grocery store to panic-buy eggs, but rather to scour the tall, narrow aisles of the the H Mart in Manhattans K Town for the viral Korean pastry known as a crungji, basically a flattened croissant. He hadnt found one yet, but his basket was filled with popular Melona ice cream, from South Korea, and two bottles of his favorite Japanese soy sauce from among the more than 100 varieties on offer. He was worried about tariffs raising the prices of his favorite goods. I never thought Id be stockpiling soy sauce, but here we are, he shrugged. Ive come to H Mart every weekend this month. Kesslers transformation from casual fan to hoarder of once-niche pantry items is symbolic of a broader shift in America. Last year, sales of Asian groceries grew almost four times faster than overall grocery sales in the U.S., according to data analytics company Circana, and topped $55 billion here, per research firm IBISWorld. Korean instant ramyun exports alone surpassed $100 million last year, thanks to the popularity of products like Nongshims Chapagetti noodles (seen in Parasite) and BTS-endorsed Buldak from Samyang Foods, which was the official hot sauce partner of this years Coachella. Leading that boom in the U.S. is H Mart, the 43-year-old Korean grocery chain that stocks thousands of brands from across Asia in what have become almost Walmart-size stores. Since its founding with a single outpost in Woodside, Queens, in 1982, H Mart has grown into the largest specialty grocer in America. Over the past three years alone, its expanded from 77 stores in 12 states to around 100 across 16 states, plus seven in Canada and one in London, generating $2 billion in annual sales, according to reporting by the New York Times. [Photo: Lane Turner/The Boston Globe/Getty Images] H Marts cultural reach has risen alongside its physical footprint, which in New York recently included a Squid Mart collaboration with Netflix for season two of Squid Game. The company has benefitted from the ascendance of K-dramas, K-pop, and the broader Korean wave, as well as TV-famous Korean fusion chefs, like David Chang and Roy Choi. Other celebrities have put an even finer point on it: Musician Michelle Zauners 2021 memoir, Crying in the H Mart, catapulted the grocery stores name onto the New York Times bestseller list. Nearly a third of H Marts customers are now non-Asian, it has saida significant pivot from the early days, when its original name (Han Ah Reum) appeared only in Korean characters. (Privately run by the Kwon family since 1982, H Mart largely shuns the media and eschews national advertising. It didnt respond to Fast Companys interview request.) Since early April, when President Trump held his Liberation Day press conference, hooked American consumers have been worried that their new obsession with Asian groceries could become a casualty of the administrations trade war. The roller coaster of tariff rate changes so far is dizzying. But unless new trade agreements are struck before the 90-day suspension expires, retaliatory tariffs will be imposed on July 9of around 25% on Japanese and Korean products, and up to 48% on Vietnamese items. Tariffs on Chinese goods, currently at 30%, could snap back to 145% by mid-August. Surveys show most Americans expect grocery prices to get hit the hardest, with half already adjusting their spending habits. On a recent earnings call, Walmart CEO Doug McMillon signaled that the rising price of imported food is a particular concern for the retailer. (Trump responded by telling Walmart to eat the tariffs.) Online, reactions have ranged from people copping to panic-buying Kewpie mayo and Fly by Jing chili crisp to grimly joking how skinny Im going to be once the tariffs hit their go-to specialty grocers aisles. Were all going to be crying in H Mart, one TikTok user commented. But the truth is more complex. H Mart, which has grown into a U.S. grocery powerhouse by stocking items from around the globe, appears hitched to such a remarkable growth trajectory that it may be less vulnerable than people fear. Asian brands, made in America Specialty foods are particularly vulnerable to tariffs. They rely on regional ingredients and techniques that are hardeven impossibleto replicate elsewhere. Champagne and Parmigiano Reggiano, for example, simply cant be produced on American soil. The same is true for many Asian food brands. Fly by Jing, for example, only uses ingredients from Chinas Sichuan province for its line of sauces and spices that launched in 2019. Founder and CEO Jing Gao says that the tariffs for her products stood at 160% prior to the 90-day negotiation period. Though Fly by Jing isnt sold at H Mart, it is carried by Whole Foods, Kroger, Walmart, and other major U.S. supermarket chains, which gives it some padding to absorb the extra costs. Even so, its an independent food brand, and Gao worries how the tariffs will impact food companies like hersand American culture, along with them. haring authentic ingredients and flavors is one of the most powerful ways to explore the nuances of other cultures, she tells Fast Company. Tariffs not only threaten our brands prosperity, she adds, but rob Americans of an accessible way to connect with and appreciate cultures at a time when we need it most. [Photo: Lane Turner/The Boston Globe/Getty Images] Large companies, as well, are wrestling with the operational unknowns that Trumps tariffs have unleashed. Last month, at an international ramyun conference in Seoul, the CEO of Samyang Foods noted that his company was forming a task force to study U.S. tariff policy more closely. Samyang has been focused on wooing American consumers. Its U.S. sales hit $280 million last year, growing 127%, thanks to its Buldak ramyun sales. For its pop-up experiences at Coachella this year, the company enlisted influencers, K-pop stars, and even American rapper GloRilla to drive awareness. But Samyang doesnt have any manufacturing facilities here, at least not yet. Some Asian food brands are in a very different position. Shoppers might be relieved to learn many of H Marts top brands outsourced production of their U.S. products years agoto right here in America. Though industry analysts say its difficult to ascertain what proportion of products H Mart imports versus sources domestically, a fair number of the brands that it stocks have manufacturing facilities in the U.S. Nongshim, the maker of Chapagetti, already manufactures the ramyun products for its North American market just outside of Los Angeles, in Rancho Cucamonga. Pulmuone, the worlds largest tofu maker and a popular H Mart brand, produces tofu in the same area. Kikkoman, Ajinomoto, and CJ Foods also maintain extensive U.S. production facilities. Some are even expanding: CJ Foods, which aims to become the No. 1 provider of ethnic cuisine in the United States, is building a 700,000-square-foot manufacturing plant in Sioux Falls, South Dakota. (It will be one of the worlds largest when it comes online in 2027.) H Mart stocks more than a hundred items made by these companies, from packaged noodles and frozen foods to bottled sauces. None of these brands would talk tariff strategy with Fast Company, or even discuss their own recent cultural momentum within this context, underscoring the general sense of confusion about what comes next. (As one high-level PR professional who works with retail food brands put it: Our clients cant get far enough away from this right now.) But last fall CJ Foods CEO Misook Pak explained the companys U.S. strategy to Bloomberg, sounding very Made in America, If you look at something like mandu [Korean dumplings], were able to take this product and localize it for consumers in the U.S., he explained. Indeed, the companys Bibigo dumplings, which are sold at H Mart and produced domestically nowadays, are available in special American flavors like chicken and cilantro. [Photo: Lane Turner/The Boston Globe/Getty Images] H Marts community hubs H Mart, for the moment, seems to be shrugging off any obstacles. The grocer has been on an expansion tear, and there are no signs yet that its slowing. In San Francisco last May, it paid $32 million to buy a strip mall in Ingleside, going from tenant to owner. It now rents storefronts in the space to Korean bakery chain Paris Baguette, a Vietnamese coffee shop, and a boba tea outpost. The largest H Mart in existencea 100,000-square-footeropened last summer in the Salt Lake City suburbs, between a Mormon church and a sporting goods store. Next, H Mart debuted its own dining hall at the countrys second-largest mall, New Jerseys American Dream, where diners can try a dozen different eateries offering create-your-own hot pots, bulgogi heroes by a Michelin-star chef, and a self-serve beer bar. View this post on Instagram A post shared by Hmart Utah (@hmartutah) Dallas will soon have a $42 million, 16-acre H Mart Plaza, set to hold 50 stores and restaurants. People in Orlando are counting the days until the state of Floridas first location opens. Las Vegas welcomed its first outlet just last week. Ive heard about it, Ive seen it, there are books about it, an excited local raved to ABC 13. These locations arent just larger than their predecessors. They’re also taking over spaces where rivals crashed and burneda fallen Super Target in Orlando, a closed Save A Lot in Illinois, a former Kmart in Salt Lake City. H Mart recently swallowed up two underperforming Albertsons stores in Los Angeles. Where H Mart thrives, it seems to refigure sterile supermarkets into vibrant community hubs. H Mart’s shoppers arent after Tide pods, after all. Theyre there for the food court, the live lobster tank, the wagyu ribeye bulgogi free samples, the cotton candy dispenser near the row of Korean claw machines full of stuffed Pokémon toys. The grocers immersive experience could help it continue to reel in shoppers even amid rising prices. That sense of discovery and connection expands beyond the stores themselves. According to data provided by market research firm Datassential, the proportion of restaurants within a half-mile of H Mart that are Korean, Chinese, Japanese, or another type of Asian food is anywhere from 200% to 1,500% higher than average nationwide. That reflects H Marts strategy of putting its stores in enclaves where the demographics closely match the offerings on aisles. But in some instances, H Mart itself is luring in other Asian-focused businesses. Almost a third of Paris Baguettes 191 U.S. cafés are within a half-mile of an H Mart, and about a quarter of all Bb.q Chicken outposts are. Both brands are frequently inside the H Mart food court. (Neither company agreed to comment for this story.) For the brand-new Las Vegas location, formerly a Savers thrift store, H Mart CEO Brian Kwon offered a rare public statement predicting, H Mart will become a place to experience the best of what communities have to offer, providing a convenient one-stop shopping place for diverse cultures and to the neighborhood, where different ethnicities of friends and neighbors can come, gather, and enjy. Already, other Korean establishments are flocking to join H Mart in its shopping plaza. Daeho Kalbijjim, which draws hourlong waits for its short-rib stews in San Francisco, just opened its first Vegas location in the H Mart shopping center. The new locations manager told local media that the proximity to the grocer is going to really help us a lot. Between H Mart carrying good food and his restaurant cooking good food, he said, we thought the combination was really good. Even as tariffs threaten costs, H Marts real edge might be something much harder to manufacture than a trade war: fierce devotion, tougher to break than any supply chain.
Category:
E-Commerce
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