What you need to know
- Alphabet, the parent company of Google, has announced its Q1 2024 financial earnings.
- The company reported $80.5 billion in revenue, highlighting strong performance across its services.
- Alphabet recently announced a major restructuring to better accelerate efforts to bring AI into its products.
Alphabet announced its Q1 2024 earnings on Wednesday (April 25), reporting more than $80 billion in revenue, 15% up from the same quarter last year.
Alphabet CEO Sundar Pichai highlights the company's strong focus on AI and the performance of other products. "Our results in the first quarter reflect strong performance from Search, YouTube and Cloud," Pichai says in a statement.
"We are well under way with our Gemini era and there's great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation."
AI has been a big focus for Google, which has focused on injecting its Gemini AI model across its services, including Search and Workspace. Google has rolled out its Gemini AI on its Pixel 8 Pro and across other devices like the Galaxy S24 series, and soon, it will be on OnePlus and OPPO phones, helping to power various generative AI features.
Search is also up, with Alphabet reporting more than $46 billion in revenue. While Google has been testing generative AI in Search, the company recently named Liz Reid as the new head of Search. The move signals a stronger focus on AI features in Search, as Pichai points out improvements in user response.
"Most notably based on our testing, we are encouraged that we are seeing an increase in Search usage among people who use the new AI overviews as well as increased user satisfaction with the results," he said during the earnings call.
When asked about how on-device Gemini AI on phones affects potential monetization, Pichai seemed confident that it shouldn't, noting that there are still plenty of use cases for accessing the cloud.
"... in terms of on-device versus cloud...there will be needs which can be done on-device, and we should definitely privacy standpoint, but there are many, many things for which people will need to reach out to the cloud. And so I don't see that as being a big driver in the on-cloud versus soft-cloud in any way."
Meanwhile, YouTube and Cloud also saw increased revenue during the quarter, but just like with Search, AI underscored everything that Google has been doing as it injects Gemini into various aspects of the business. It's no surprise, however, as other companies such as Meta continue to do the same.
Meta, which recently reported its Q1 2024 earnings, announced its latest AI model that's now found across its apps, as well as new multimodal search capabilities for the Ray-Ban Meta smart glasses.
However, to combat the growing competition, Google is partnering with companies like Meta, bringing its search results to Meta AI for real-time results within the apps. Google also recently announced a massive internal reorganization, combining its hardware and software teams to better accelerate momentum with new products and services, particularly with AI features.
