Google spent the past year grappling with two of the biggest threats in its 25-year history: the rise of generative ai and the growing noise of regulation. ai, in particular, has shaken the company to its core: it made big changes to search, realigned the Search, Android, and hardware teams around ai, and launched its own Gemini ai model to take advantage of the opportunity.
Google executives cut projects and laid off employees to refocus, and yesterday it announced its first dividend and a $70 billion share buyback along with its first-quarter 2024 earnings.
Investors, at least, are eating it up: Google's parent company Alphabet finally reached and officially maintained a $2 trillion market cap for an entire trading day after briefly touching $2 trillion in November 2021. Google is the fourth most valuable public company in the world. world, behind Nvidia ($2.2 billion), Apple ($2.6 billion) and Microsoft ($3.0 billion). amazon is currently at $1.8 trillion and Meta is at $1.1 trillion.
Unlike Meta, whose share price fell 10 percent after Mark Zuckerberg said it would take years to make money from “massive” bets on generative ai, Google said yesterday that it is already finding some small ways to sell it; For example, it is helping advertisers target their ads. people with ai in its Performance Max tool and that those advertisers are “63 percent more likely to run a campaign with good or excellent ad strength.”
The company also says Discover Financial is deploying ai tools to nearly 10,000 call center agents and that Ikea is seeing an increase in a form of revenue from “value-based bidding solutions.” And while there's no talk yet of monetizing ai responses on Google Search, CEO Sundar Pichai said, “…we're very confident that we can manage the cost of how to serve these queries.”
For now, Google says it doesn't want to disrupt search too much: “We're being measured in how we do this, focusing on areas where Gen ai can improve the search experience while prioritizing traffic to websites and merchants,” it said. Pichai.
Google's current businesses also appear to be doing well: The company made $23.7 billion in profits on $80.5 billion in revenue, according to the First Quarter 2024 Earnings Report It was released yesterday. Not only is that 15 percent more revenue year over year, but 14 percent more profit than it made during the holiday quarter when search and advertising revenue was a little higher.
And while Google may have cut more than a thousand employees to help boost those profits, it appears the layoffs may have slowed or stopped. Last quarter we reported that Google spent $700 million on layoffs in January alone, and yet the new Q1 report shows that Google only spent $716 million on “severance and related charges” during January, February and March.
First-quarter search and advertising revenue each increased 14 percent year over year, YouTube ads increased nearly 21 percent, and “subscriptions, platforms and devices” increased 18 percent year over year, primarily due to premium YouTube subscriptions, Google's chief business officer said. official Philipp Schindler (so not necessarily Pixel 8 sales).
Google said it's also improving its ability to challenge TikTok and instagram Reels, and Schindler talked about how 50 percent more creators are uploading short YouTube Shorts videos and how Shorts' monetization rate has increased by 12 percent alone. in the last quarter.
Google will host its developer conference, Google I/O, on May 14.
