Alphabet and Google CEO Sundar Pichai expects YouTube and Cloud business to clock over $100 billion in revenue by the end of 2024.
“It took Google more than 15 years to reach $100 billion in annual revenue. In just the last six years, we have gone from $100 billion to more than $300 billion in annual revenue. Of course, Search continues to power that as you see in our Q1 results. But in addition, we expect YouTube overall and Cloud to exit 2024 at a combined annual run rate of over $100 billion. This shows our track record of investing in and building successful new growing businesses,” Pichai says during Alphabet’s first-quarter earnings call.
Google's parent Alphabet reported a revenue of $80.5 billion for the quarter ended March, up 15% year-on-year. Revenue from Search stood at $46 billion, Cloud at $9.5 billion and YouTube at $8 billion.
Operating margin improved to 32% in Q1 from 25% a year ago.
The tech giant’s Q1 results were led by strong performance from Search, YouTube and Cloud.
Alphabet also announced its first-ever quarterly dividend of 20 cents per share.
Pichai said the company has clear paths to AI monetisation through Ads and Cloud, as well as subscriptions. “New AI features are helping advertisers, including bringing Gemini models into Performance Max. Our Cloud business continues to grow, as we bring the best of Google AI to enterprise customers and organizations around the world. And Google One now has crossed 100 million paid subscribers, and in Q1 we introduced a new AI Premium plan with Gemini Advanced,” he says.
Google has six products with more than 2 billion monthly users, including 3 billion Android devices. 15 products have half a billion users. “This gives us a lot of opportunities to bring helpful Gen AI features and multimodal capabilities to people everywhere and improve their experiences. We’ve brought many new AI features to Pixel, Photos, Chrome, Messages and more,” says Pichai.
On artificial intelligence innovations in search, Pichai says the company has been experimenting with Search Generative Experience in Search Labs across a wide range of queries. “And now we’re starting to bring AI overviews to the main search results page. We are being measured in how we do this, focusing on areas where gen AI can improve the Search experience,” he says.
“We are seeing early confirmation of our thesis that this will expand the universe of queries where we are able to really provide people with a mix of actual answers linked to sources across the web and bring a variety of perspectives, all in an innovative way. And we've been rolling out AI overviews in the U.S. and the U.K., trying to mainly tackle queries, which are more complex, where we think SGE will clearly improve the experience,” says Pichai.
