Google is officially a $2 trillion company

Google has spent the past year dealing 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, shook the company to its core: it made major changes to research, realigned research, Android, and hardware teams around AI, and launched its own Gemini AI model to capitalize on the opportunity.

Google executives have cut projects and laid off employees to refocus, and yesterday 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, has finally reached and officially maintained a $2 trillion market capitalization for a full day of trading, after briefly touching $2 trillion in November 2021. Google is the fourth most valuable public company in the world. world, behind Nvidia ($2.2 trillion), Apple ($2.6 trillion) and Microsoft ($3.0 trillion). Amazon is currently at $1.8 trillion and Meta is at $1.1 trillion.

Unlike Meta, whose share price fell 10% after Mark Zuckerberg said it would take years to make money on “massive” bets on generative AI, Google said yesterday that it is already finding some small ways to sell it – e.g. , is helping advertisers target people with AI in its Performance Max tool and that these advertisers are “63% more likely to publish a campaign with good or excellent ad quality.”

The company also claims that Discover Financial is rolling out AI tools to nearly 10,000 call center agents and that Ikea is seeing an increase in one form of revenue from “value-based bidding solutions.” And while there’s no talk yet about monetizing AI answers in 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 on how we do this, focusing on areas where Gen AI can improve the search experience while prioritizing traffic to sites and merchants.” “, he said. Pichai.

Google’s existing business also appears to be doing very well: The company made $23.7 billion in profit and $80.5 billion in revenue, according to the Q1 2024 Earnings Report was released yesterday. This not only represents 15% more revenue year over year, but also 14% more profit than was achieved during the vacation quarter when search and advertising revenues were a little higher.

And while Google may have laid off more than a thousand employees to help boost those profits, it appears the layoffs may have slowed or paused. We reported last quarter that Google spent $700 million on layoffs in January alone, and yet the new Q1 report shows that Google spent just $716 million on “severance and related charges” in January, February and March.

Search and advertising revenue in the first quarter increased 14% year over year, YouTube ads increased almost 21% and “subscriptions, platforms and devices” increased 18% year over year – mainly due to YouTube premium subscriptions, the boss said Google business. official Philipp Schindler (so not necessarily Pixel 8 sales).

Google said it is also improving its ability to challenge TikTok and Instagram Reels, with Schindler talking about how 50% more creators are uploading short YouTube Shorts videos and how the Shorts monetization rate increased 12% in the last quarter alone.

Google will host its developer conference, Google I/O, on May 14.