Google, one of the world’s leading technology companies, has officially crossed the $2 trillion mark in market capitalization, following a year of significant challenges and strategic shifts. The milestone comes amid rapid changes due to generative artificial intelligence (AI) and growing regulatory pressures. AI’s rise has led Google to restructure, with major changes to its core search functions, a reorientation of teams like Search, Android, and hardware, and the introduction of its Gemini AI model to seize new opportunities.
Google’s executive team made tough decisions to adapt to these challenges, including project cuts and employee layoffs. Alongside its first-ever dividend announcement, Google revealed a $70 billion share buyback program during its Q1 2024 earnings release. These moves appear to have bolstered investor confidence, as Alphabet, Google’s parent company, maintained a market cap of $2 trillion throughout a full day of trading. This places Google as the fourth most valuable public company globally, behind Nvidia, Apple, and Microsoft. Other notable companies like Amazon and Meta have market caps of $1.8 trillion and $1.1 trillion, respectively.
Unlike Meta, which experienced a 10% stock price drop following Mark Zuckerberg’s comments about the long-term nature of AI investments, Google has found immediate revenue opportunities. For example, the company’s Performance Max tool uses AI to help advertisers target audiences more effectively, with a reported 63% increase in successful ad campaigns. Other ventures like Discover Financial’s implementation of AI tools for nearly 10,000 call center agents and Ikea’s revenue growth through value-based bidding solutions show Google’s innovative approach to integrating AI into various business segments.
Google’s Q1 2024 earnings report indicates a robust financial position, with $80.5 billion in revenue and $23.7 billion in profit, marking a 15% increase in revenue and a 14% increase in profit year-over-year. This success comes despite significant layoffs; however, the pace of layoffs seems to have slowed, with Google spending $716 million on severance and related charges across January, February, and March, compared to $700 million in January alone.
Google’s search and advertising businesses continue to grow, with a 14% year-over-year increase in both categories. YouTube ad revenue rose nearly 21%, and “subscriptions, platforms, and devices” increased by 18%, mainly due to premium YouTube subscriptions.
The monetization of YouTube Shorts has seen a 12% growth in the last quarter, suggesting Google’s competitiveness in the short-form video market, challenging platforms like TikTok and Instagram Reels.
Google’s future remains bright, with its developer conference, Google I/O, scheduled for May 14th, likely to reveal more about the company’s plans for AI and other technologies.
To learn more about Google’s latest achievements, you can visit The Verge.