Bloomberg News reports that Google parent Alphabet reported revenue for the second quarter that surpassed the analysts’ expectations. It was fostered by the advertising related to the flagship business of search for the company. The search business is struggling with new competition posed by artificial intelligence or AI chatbots.
Sales of Alphabet
Alphabet’s sale, which excludes partner payouts, was found to be USD62 billion in the quarter, as stated by the company Tuesday. According to the analysts, there was a projection of USD60.2 billion, as per data compiled by Bloomberg.
Search advertising’s performance was good and generated revenue worth USD42.6 billion compared to the average estimate of the analysts, which amounted to USD42.2 billion. In late trading, the shares gained beyond 7%.
The search business of Google, which is its flagship business, has withstood the slowdown in advertising that adversely impacted the social media companies, including Snap and Meta Platforms, in recent quarters.
The company’s search product has continued to dominate despite the new threats from Open AI and Microsoft. These companies joined up, providing an alternative called ChatGPT. It is expected to answer the questions of the users. Google’s chatbot, known as Bard, is still not widely used worldwide.
The net income was found to be USD18.37 billion, equivalent to USD1.44 per share, compared with the share estimate of Wall Street, which was expected to be USD1.32 per share.
What did Alphabet have to say?
Alphabet stated that Officer Ruth Porat, the chief financial officer, will take up the newly created position of chief investment officer and president. This transition of roles will come into effect in September.
What was the profit of Google’s cloud unit?
The cloud unit of Google earned a profit of USD395 million from sales of USD8 billion. This figure left behind or defeated the estimated profit of USD 163 million. Although this division lags behind the cloud business size at Microsoft and Amazon, this effort is being looked upon as one of the best bets for the growth of Google. It is because the search engine business of the company is maturing. Moreover, the requirement and demand for computing infrastructure surges with the investment of the industry into artificial intelligence.
The other bets of Alphabet
A collection of new companies, including the self-driving Waymo venture and Verily, the life sciences unit, are the other bets. These nascent companies brought in USD285 million in the second quarter as revenue while simultaneously narrowing the losses to USD$ 813 million.
Ad sales reported from YouTube amounted to USD 7.67 billion, compared with the estimated USD 7.4 billion of Wall Street. This division, in particular, has been the most vulnerable to the pullback among marketers’ spending over the past years. As such, the performance just before the estimates might indicate a good sign for the rivals in the industry.
