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Google is ready to fill its AI searches with ads

Oct 24, 2023 - theverge.com
Google's parent company, Alphabet, reported strong third quarter earnings, with the search business earning $44 billion, an 11% increase year over year. Despite facing stiff competition and investing heavily in AI integration, Google's ad business continues to thrive. The company is also exploring how its AI-powered Search Generative Experience (SGE) will affect its core business, with CEO Sundar Pichai indicating that new ad formats compatible with SGE are being tested.

Other areas of Google's business are also performing well, with YouTube ads generating $7.9 billion, a 12% increase from the previous year, and the cloud business revenues reaching $8.4 billion, a 22% increase from Q3 2022. However, the company has not yet announced a successor for CFO Ruth Porat, who is set to become Alphabet's president and chief investment officer. Google is also facing a major antitrust trial launched by the Department of Justice in September.

Key takeaways:

  • Google's Search business, the company's main source of revenue, earned $44 billion, an 11 percent increase year over year, despite fierce competition and significant investment in AI.
  • Google is experimenting with new ad formats for its AI-powered Search Generative Experience (SGE), with CEO Sundar Pichai emphasizing the importance of ensuring advertisers can reach potential customers in this new experience.
  • Other parts of Google's business, including YouTube ads and its cloud business, are also performing well, with revenues of $7.9 billion and $8.4 billion respectively.
  • There is uncertainty over who will succeed Ruth Porat as CFO of Alphabet, and potential changes to Alphabet's "Other Bets" investments, as suggested by Porat during the earnings call.
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