Google, one of the world’s tech giants, has officially become a $2 trillion company, marking a significant milestone in its 25-year history. This achievement comes after a challenging year in which the company faced two major threats: the rapid rise of generative AI and increasing regulatory scrutiny. The impact of AI has been profound, leading to significant changes in Google’s search strategy, restructuring of its Search, Android, and hardware teams, and the launch of its own Gemini AI model.
To adapt to these changes, Google executives cut projects and laid off employees, and yesterday the company announced its first-ever dividend along with a $70 billion share buyback program alongside its Q1 2024 earnings report. The financial results were strong, with Google’s parent company Alphabet officially maintaining a $2 trillion market capitalization for an entire day of trading, a level it briefly touched in November 2021. This makes Google the fourth most valuable public company globally, trailing Nvidia ($2.2 trillion), Apple ($2.6 trillion), and Microsoft ($3.0 trillion).
Investors React Positively to Google’s Q1 2024 Earnings
Investors have welcomed the news, pushing Google’s stock upward after the Q1 2024 earnings report showed substantial growth. The company recorded $80.5 billion in revenue, a 15% increase year over year, and $23.7 billion in profit, a 14% increase over the previous quarter. The rise in revenue was largely driven by search and advertising, which each saw a 14% increase year over year. Additionally, YouTube ads grew by nearly 21%, and “subscriptions, platforms, and devices” saw an 18% rise due to premium YouTube subscriptions, as noted by Google chief business officer Philipp Schindler.
Google’s Strategies in Response to the Changing Tech Landscape
Google is finding innovative ways to monetize AI. For instance, the company is helping advertisers target people using its AI-driven Performance Max tool, with a reported 63% of advertisers having successful campaigns. Additionally, Google reported that Discover Financial is deploying AI tools to nearly 10,000 call center agents, and Ikea is seeing an increase in revenue from “value-based bidding solutions.”
Despite these strides in AI, Google remains cautious about disrupting search too much. CEO Sundar Pichai emphasized a measured approach, focusing on enhancing the search experience while prioritizing traffic to websites and merchants.
Google’s upcoming Google I/O developer conference on May 14th is expected to reveal more about the company’s plans and innovations in the tech sector.
For more information on this story, visit The Verge.
