The state of your health that day . [laughter] one of the most powerful women in the Business World today is ruth porat. She started as an investment banker at Morgan Stanley and rose to be the cfo of Morgan Stanley and rose to be the cfo of google and now alphabet. In that role she has enormous influence at that company and has done a terrific job in making certain that the Balance Sheet works well and that they really are much better organized. I have no doubt she will be a power at alphabet for a long time unless the next president says i would like her to be secretary of the treasury. She would be a terrific candidate for that position. During this period of time, google and alphabet have done quite well. Your stock is up more than 20 this year and from the time you became the cfo, the stock is up over 200 and the market cap is up over 200 , so its done quite well under your leadership. Im curious, are more people looking at doing searches now during this covid19 period of time than ever before, or are people not spending as much time searching . Ruth no, people are spending a lot of time searching. We have trillions of searches per year. Precovid, post covid. Its really the nature of searches that changed. Early in the crisis, people really migrated to shifting to information about the disease, that they need to know, all the information about covid. You then saw people shifting to, how do i live my life during a covid world . How do i cook . What do i do on meditation and wellness . Now you are seeing people moving back into more commercial activities. I think one of the big surges that we saw was, how can i help in my community . How can i help others . Its always quite inspiring to see through search how people are feeling about the world. David most of your employees are moving are working remotely . Ruth we moved everybody to remote work at home, all 120,000 of us, but as companies are as countries are opening up, we are starting to move back in. And places in europe been bringing some people back, but fundamentally we moved everyone to working from home. David when you started working remotely, did you worry it would be a problem because you have all these people who are technically savvy. Ruth when we started, it did seem daunting. I am responsible for our Crisis Response and put together strong governance on how to work from home and we were in sync daily. That worked really well. What we were most concerned about what would be the impact on productivity and wellness. Our chief medical officer early in the crisis said more people would be affected by Mental Health issues than the disease itself. We focused on those and that was really important. The other thing is google is really about our people and the ability to deliver for users and communities because of our compute capacity. One of the things we didnt have to worry about was our ability to really deal with the surge in online activity. That was because all the investments over the years and all the testing for what could happen in a crisis scenario. I think it is an important point, because you cannot solve the Risk Management issue in the middle of a crisis. You obviously need to solve it ahead of time. David Many Companies are saying now that i have learned my people can work from home maybe i dont need all these people in the office, or i dont need all these people. Is that your view, you may not need all of the people were need them in the office . Ruth we believe in people all together, its a critical element for innovation. Collaboration within teams and across teams. Collaboration and serendipity. We do look forward to having people back in the office. What we are looking at is the productivity lift you get it if people have the ability to home somee same days, and be in the office in particular when the rest of their team or teams are in the office. You have better access to talent because youre solving what people want in their personal life, and it will actually result in a better outcome. That means for real estate, we are still figuring out. David early on, google was well known for free food. If theyre working at home, do you give them free food, showing up by delivery or Something Like that, or how do you compensate for that . Ruth we are not doing that. A lot of people focus on food, but really what were trying to create is a fun, quirky, magical campus. It is about more than just free food. It is about the experience. What we did when we moved everybody to home is we moved a lot of connecting the community to virtual delivery. So for food, as an example, you can do a oneonone session with a chef, you can do a cooking class. We moved our fitness classes to virtual fitness classes and even some goofy, google style ones like yoga with your dog. David what have you learned about yourself during this time . Ruth one of the things that was gratifying is what i saw at google and about my colleagues, and its obviously been an extraordinarily stressful time. We feel this responsibility areuse so many people counting on us for quality information. What i saw was we really stepped up, and that was inspiring during this extraordinary time. What i learned about myself is, one of the positive elements of this has been sheltering in place and having my kids, who have graduated from college, they are now back with us for at least a limited period of time, and thats been remarkable. Ive thoroughly enjoyed that. David some people say google, facebook, microsoft, apple, amazon, are too powerful. They have so much power in our economy that its not healthy. There have been congressional hearings recently where your ceo testified. What is your response to the view that the Technology Companies are becoming so dominant in our economy that its not healthy . Ruth we are very mindful of the fact that with the scale of the Company Comes scrutiny, and it is incumbent on us to engage with regulators and help them understand what is it that we are doing that is of benefit, how are we providing Better Services at lower cost, which is really indicative of the competitive nature of the world in which we operate. Weve got intense competition within the u. S. And outside of the u. S. , and i think this covid experience, Many Companies and individuals would not have been able to operate the way they did without the support and benefit from technology. But its a fair question, and we are engaged constructively here and around the globe with regulators on it. Than 100 have more billion of cash on your Balance Sheet, a lot of cash. Why do you need all that cash . Are you going to use it for investments . Ruth at the end of the second quarter, we had 120 billion, but who is counting . You are right. When i got to google, there had been a longstanding view that it was helpful to have cash because of the optionality it provided. The question i posed was how much is too much and how much is too little, and can we try and dimension that analytically . And put together the data that lead to a conversation about beginning a Share Repurchase program. It started small, but weve increased it five times in the last number of years. The last one we just did in the second quarter, 20 billion authorization. So it has been a journey. We have been increasing the turn the return to capital. I spent a big chunk of my career covering firms like carlisle , private equity firms, this is trying to get the balance. David is it harder to break into the Technology World or the financial world, as a woman . Ruth its a more collaborative environment, in tech, i would say. Wall street can be pretty rough. David lets talk about your background, how you came to be the cfo of google, alphabet, and before that, Morgan Stanley. Where did you grow up . Ruth i was born in england, mostly grew up in Silicon Valley. My father was a holocaust refugee. He escaped from vienna right , when hestallnacht was 16. He had no high school or college education. He escaped to palestine and as soon as he could, he enlisted in the british army under montgomery. His view was that the only way to find peace in a Peaceful Place was to have a scale that a skill that people needed. So he decided to teach himself physics while he was in the army. His fellow soldiers would tease him and say you will before you ever master physics. His answer was, if i die, i want to die an educated man. After the war, he was one of the lucky ones. He was given a place at the university of manchester. He got a masters degree and a phd. Thats where i was born. He was given a position at harvard. The only two places he ever worked were harvard and stanford. We moved eventually to Silicon Valley, and thats where i grew up. David you went to stanford undergrad, and did you major in finance . Ruth i majored in economics and International Relations and thought i would go off to be a lawyer just like you. David you were smart not to do that. You got an mba from wharton, and you went to wall street . Ruth i went from stanford to the London School of economics to wharton. I assumed i would be a consultant. When i started in business school, i was convinced that what i wanted to do was work with companies and help them understand their problems. Then i took a fascinating course with a great teacher and he opened my eyes to this thing called wall street mergers and acquisitions. I got excited. I went from completely convinced i was doing one thing to completely convinced the only thing a wanted to do was mergers. David when you went to Morgan Stanley, was it 50 women . Ruth far from it. When i started at Morgan Stanley, it was 1987, so it was sort of the stone age for any sort of sense of what was the role of women in banking. I think the general attitude was that those of us who were there would get married, have kids and leave, we didnt have the stamina, it was just a question of time. And i loved Morgan Stanley, it was the best of the best. But that was sort of the ethos on wall street. In fact, a couple of years into my career, i was working on the deal and i was out with a partner and a client. I was pregnant with our first child, and the partner actually turned to the client and said, ruth may come back after the first child, but theres no way she will come back after the second child. Liked mely the client better than the partner and basically told him he was in idiot, and that made an impression on me. The thing that was inspiring and helpful and critical in my career was there were so many extraordinary men who really bet on me, helped open doors. I didnt know at the time those were sponsors, but thats what they were. David you became the cfo, and at some point you were one of the most important people at Morgan Stanley, and u. S. Government calls up and said why dont you come and work at the Treasury Department in a senior position . Did you seriously consider doing that . Meaningfulf the most parts of my career was in the 2008 crisis when secretary paulson asked me to lead a team to help him with the housing crisis, and spent the entire period working on fannie mae and freddie mac and that evolved into work on aig, and i thought it was extraordinary to be able to use skills i developed over decades at Morgan Stanley for something so important for the country. So that remains one of the most meaningful times for me. David did you do that as an employee of Morgan Stanley . Ruth i was. David Morgan Stanley also went through a crisis during that time, im sure you remember it, where Morgan Stanley was close to maybe not being able to survive, and then a japanese investor said we will put in some money. It turned out that money was at three times the stock price you were trading at, and people werent sure if the japanese company, mitsubishi, would show up. Were you ever in doubt they would show up with that money . Ruth that was a terrifying period of time. The series of events was, there was the Lehman Brothers famous weekend, followed by a call i got from the Federal Reserve saying we collectively had worked on the wrong thing, we need to focus on aig, and asked me to get back down to the Federal Reserve that monday that sunday evening. They said aig would be out of money by wednesday, and in fact it was tuesday when they were out of money. Thats the point at which Morgan Stanley was running into its own very severe liquidity crisis. David Morgan Stanley obviously prospered through that time and survived and did quite well. Then somebody called you up, i dont know who it was was it a headhunter or somebody from google, saying we would like you to reconsider being the cfo. Were you surprised at that offer because you were wall street person and not a Technology Person . Ruth it was a very different path to the question. I was on the stanford board and had the opportunity to spend some time with bill campbell, who was an iconic coach to so many people. I left the Board Meeting and went to his home and sat down with him to talk about life, generally. He started probing what next, what would i want to do . My comment to him was, i didnt know, at some point i would want another chapter, but one thing i knew for certain is that i would not leave Morgan Stanley as cfo to be a cfo anywhere else. For two hours, he kept coming back to that strong assertion. At the end of two hours, he said, so you wouldnt leave to be a cfo anywhere else, and i was adamant. Correct. He said, i have the perfect job for you, you should be the cfo of google. And of course the two of us burst into laughter, and said, that one, i would do. I didnt believe it. I left his home and didnt actually believe it was real or that it would happen. Within a couple of hours he called and said go over to larry pages house and spend some time with him and see if this works. David so you went over to see larry page and he said, guess what, i want you to be the cfo. Ruth i had known him, i had worked on the google ipo and i had different interactions through the stanford board. We spent two hours in a conversation, fascinating as larry page always is. I left again, not believing it would happen, and quickly it came together. David so you took the position, but now youre breaking into another world where women are not that prominent. Was it harder to break into the Technology World as a woman, or to the financial world as a woman . Ruth when i broke into the financial world, i was a junior. Its harder when youre junior as opposed to when youre coming in as someone who is credentialed. If youre asking which was tougher, wall street or tech, both have evolved meaningfully since those days of the boys club on wall street that were so painful. I think there is a much greater awareness that it is not just the right thing to do to have diversity in the senior ranks throughout an organization, but at least a better outcome. I think they are similar. The difference is its a more collaborative environment. In tech, i would say, and wall street can be pretty rough. David the more testosterone filled places, wall street or Silicon Valley . Ruth theres enough to go around. David when you get there, youre a buttondown cfo of stanley, very precise. Google is probably less precise place when you get there. They are making so much money they dont have to worry about every little dollar. Did you say we want to change things and people said dont want to change because were doing well, or did they want to change . Ruth throughout my career, my view is that if you anchor your points in data, it becomes very easy to engage people in what is the issue and what is the proper path forward. One of the extraordinary things that google is we have very smart and very inquisitive people. As i laid out whatever issue it is, anchored in data, it engaged the conversations. So i actually didnt find it to be discordant. In fact, i was really impressed yes, letsew of throw in the new idea and lets understand what and why. It has been a journey. David what is the secret to having it all . Ruth the most important thing is to find a mix in life that works for you. David i assume you are coming to us from your bedroom. Reed it is actually my sons old bedroom. We are locked down in covid. We are working out of the home. David how have you found that to be . You are a Technology Company so people would presume you are good at adapting. Did it turn out to be harder than you thought . Or was it easier than you thought . Reed the hardest thing has been producing our films and series because that is very much onset and in the physical realm. We are working on that. I would say its a hallmark of the culture to be very adaptive. No one waits for me to tell them what to do. When youve built a culture as we have, everybody pitches in and figures out what they need to do. An example would be our animation group. I cannot take the credit, but they moved hundreds of workstations out of the office into the home over a weekend and have been able to continue to produce great animated films and series from the house in a way that was remarkable and not centrally directed. David many ceos say offcamera they are not going to be hiring back everybody they once had. They realize they can get by with fewer people and they do not need as much office space because people are happy to work from home. Will that be true in your case . Reed the virus has been so tragic for people, the economy and unemployment. And certainly hotels and other businesses like that are down. Fortunately, as an internet business, we are up, so we have continued to hire through this crisis. We are adding new buildings. We are incredibly fortunate. David so alphabet is the parent company, you are the cfo of that and also cfo of google. Google is a search engine, and that is still massively profitable by anyones standard. What about Cloud Computing . You are number three in that business, but catching up to number one is amazon and number two is microsoft. Is that an important Growth Engine as well . Ruth its a very important one. It is a sizable market in early innings. The opportunity for businesses to migrate to the cloud provides them with extraordinary edit capabilities and they are looking to us, whether for security or Data Analytics or ai. Thats what we are able to do working with customers and you have really seen the important migration to the cloud, so we are investing meaningfully in it and we see it as a sizable opportunity. David one of your areas of focus is health care. And health related. Why is that such an important focus of the founders and you in terms of health care . Why is that so important to you . Have the opportunity with technology to make a fundamental difference in health care, in particular with ai in a host of areas. For me, personally, im a Breast Cancer survivor. I have had Breast Cancer twice, i have gone through chemo twice, radiation, more surgery than one can imagine. I view myself as one of the really lucky ones. I was here in new york city when i was first diagnosed. I was treated at memorial sloankettering. I had the best care, and here i am as healthy as ive ever been. Not everybody gets that kind of break. A year or two ago, i remember when our ai engineers had a breakthrough in earlystage detection of metastatic rest cancer with ai, which struck me as precisely the kind of thing that is transformative. There was so much debate about whether ai is a positive or not. I wanted to make sure i got an objective, nontech view of this. I called my oncologist to ask whether i was reading this the right way, and it really had the impact i expected. His answer was, you cannot democratize Health Care Without ai. So we look at this as this opportunity to democratize health care, to provide service, to identify diseases earlier, to do things by telehealth, that enables everyone to get the kind of care that i had. Thats why i am passionate about it. David if someone is watching this, man or woman, they say she is a leader, she must have some qualities i would like to know about more. What are the qualities you think are important to be a leader . Ruth one of them, its very important to make clear decisions anchored in data. Its the way you can build support for the ideas and know where to double down on great opportunities for the longterm and where you should be pulling back. It starts with Data Analytics. The other is integrity in building a culture that makes it really clear that you expect the highest Quality Performance and integrity at all times from your people. I would say that the other is making it really clear that you want to build a diverse team and you are open to, not only open, really expect diverse views and debates. Ive often been asked how do i think about rising stars, and my answer is, i want some who is in my face, who challenges me. I think creating an environment where there is that open discussion is really important. David some people say its very difficult for women to have it all, but you seem to have it all. Whats the secret to having it all, and is it harder than people would think, or easier than people think . Ruth i think it depends on how you define having it all. I have been asked about worklife balance, and i think it is a horrible term and everyone should banish it from their vocabulary. The physics of it are hard. To me, the important thing is to find a mix in life that works for you. For me, its been an incredible career. I get a lot of joy and energy out of what im doing. And then i have an amazing family. Ive been married to an extraordinary man forever and we have three wonderful kids. For some people, it may not be kids, but its got to be something, other than work. And its finding a mix. Sometimes you may be more heavily focused on work, other times more heavily focused on family, and that makes changes that mix changes throughout your life. To me, thats been the most important element of it. I would say i get very concerned when i hear women have a plan. A plan on when youre going to sequence each step along the way. I would say in particular, when i had cancer and didnt know what was going to come, i was able to look back on my life and say i have no regrets. Im doug hirsch. You may already know that goodrx can help you save up to 80 on your prescriptions. Unfortunately, Many Americans cant get to a doctor right now. The good news is that for many health issues, you can see a doctor online. Its easy. Just go to goodrx. Com, and with a few clicks, youll be treated by a licensed medical professional, all from the comfort of your own home. Visits are confidential and affordable. Need a prescription . Your doctor can send it to your pharmacy or have it mailed to you. Get the healthcare you deserve at goodrx. Com. Welcome to bloomberg front row. To will danalking. Ff of Fidelity Investments mutual funds like his Fidelity Contra Fund are not so sexy anymore and money has been flowing out, not in. Will there is a demographic issue, we need to appeal to generation z and the Younger Generation as well. App is, i think our quite good, a typical gen z