Google needs a CFO.

Ruth Porat, SVP and CFO at Google and parent company Alphabet, was promoted to the newly created role of president and chief investment officer, effective Sept. 1. Porat will continue as CFO of Alphabet and Google until a successor is appointed, the company said Tuesday in its earnings release.

Porat is the tech giant’s longest-serving CFO, beginning in 2015. Last year, she oversaw Google’s acquisition of cybersecurity company Mandiant for $5.4 billion, a deal completed in September. It was the company’s second-largest acquisition ever.

Porat will continue to report to CEO Sundar Pichai but will focus on the company’s global investments and on engagement with policymakers and regulators. She will oversee the company’s “Other Bets” portfolio, which includes Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X.

Porat said on the earnings call she was “excited” about the new role, adding: “To be able to focus on the impact of economic growth and the opportunity for people, for organizations, for countries, I think is a privilege.”

As for Q2 earnings, Alphabet came in with $74.6 billion in revenue, compared with $69.6 billion a year ago. Revenue beat expectations of $72.75 billion, and ad revenue reached $58.14 billion, up from $56.2 billion at the same time last year. Net income was $18.4 billion, up from $16 billion. Due to the mass layoffs announced in January, it incurred employee severance and related charges of $2 billion for the six months ending June 30. 

Porat said the quarterly results showed a “continued resilience in Search, with an acceleration of growth in both Search and YouTube, as well as momentum in Cloud.” The company is continuing to invest for growth, she said.

A focus on A.I. was continually referenced during the earnings call. “This is our seventh year as an A.I.-first company, and we intuitively know how to incorporate A.I. into our products,” Pichai said. The company is “driving the next evolution of Search,” he noted in the announcement.

My colleague Jeremy Kahn’s new feature, “Inside Google’s scramble to reinvent its $160 billion search business—and survive the A.I. revolution,” takes a deep dive into the company’s pursuits.

“Now A.I. is having a major moment—but a Google rival is grabbing all the attention,” Kahn writes. “The November debut of ChatGPT caught Google off guard, setting off a frantic six months in which it scrambled to match the generative A.I. offerings being rolled out by ChatGPT creator OpenAI and its partner and backer, Microsoft.”

In March, Google launched Bard as an answer to ChatGPT and Microsoft’s Bing Chat. Since then, Google has been making updates to the product. But Search remains Google’s bread and butter, driving more than $160 billion in revenue last year—about 60% of Alphabet’s total, Kahn writes. Google introduced “search generative experience,” or SGE, but will it continue to generate comparable revenue?

“That question,” Kahn notes, “is at the heart of Google’s innovator’s dilemma.”

You can read his full analysis here.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Morgan Stanley Wealth Management announced the results of its quarterly individual investor pulse survey. Fifty-five percent of investors surveyed are bullish on Q3—up 3 percentage points from Q2. More investors now think that the market will end in the green this quarter with 58% predicting a rise, 10 percentage points higher than last quarter, the survey found.

In addition, 54% think that inflation will reach normal levels by the end of the year, up 4 percentage points quarter over quarter.

The survey was conducted from July 5-20 among an online U.S. sample of 909 self-directed investors.

Going deeper

The audit, tax and advisory firm Grant Thornton LLP's 2023 Q2 CFO survey found that finance chiefs are heavily focused on two areas: building and preserving a workforce that can help drive them toward growth; and investing in technology that has the potential to deliver efficiency and revenue gains. Sixty-eight percent of respondents said they expect revenue growth at their organizations over the next 12 months. Meanwhile, 67% expect net profit growth. Also, just 27% of CFOs forecasted potential layoffs, down from 40% the previous quarter.

“It’s a different environment than it was in the past,” Margaret Belden, people and organization director at Grant Thornton, said in a statement. “It’s hard enough to find talent right now. If you have to reduce expenses, look at other non-workforce areas such as projects that can wait — and look at streamlining operations and leveraging technology.”

Leaderboard

Jason Marino was promoted to EVP and CFO at Marriott Vacations Worldwide Corporation (NYSE: VAC), effective Sept. 30. Marino will succeed Anthony “Tony” Terry, who announced his intent to retire earlier this year. Marino currently serves as SVP of strategy, financial planning and analysis and operational finance of Vacation Ownership. He joined the company as VP of corporate finance in 2014, where he helped facilitate the $4 billion acquisition of ILG in 2018. Before Marriott Vacations Worldwide, Marino served as managing director and head of business development and corporate finance at Cantor Commercial Real Estate.

Pamela Rothka was named CFO at Empower AI (formerly NCI Information Systems), a provider of information technology solutions. With nearly 30 years of financial leadership expertise, Rothka has held senior financial leadership roles at several privately held, private equity-backed, and publicly traded government contractors, including serving as CFO of ECS Federal, Octo Consulting, and Buchanan & Edwards.

Overheard

“The signal will probably be, yes, we’re hiking, but then we think we can sit here for a while and see. But no promises. They can’t give up the option.”

—Kathy Jones, chief fixed income strategist at Charles Schwab, told CNBC regarding the Federal Reserve's expected approval of an interest rate hike during its meeting today. It would be the 11th interest rate increase since March 2022. The Federal Open Market Committee officials will then have to decide whether they’ve gone far enough or if there’s still more work to do in the fight against inflation.