Google has reported an outstanding quarter, generating nearly US$85 billion in revenue, thanks mainly to its search and cloud computing businesses. Google's parent company, Alphabet, released the quarter-two earnings report on Tuesday, revealing that Search alone brought in US$48.5 billion.
Cloud division milestones
Google's cloud division has reached new heights, earning $10 billion for the first time and achieving $1 billion in operating profit. During the earnings call on Tuesday, Google CEO Sundar Pichai highlighted the company's generative AI solutions for Cloud customers. These solutions have already generated billions of dollars in revenue and are used by over 2 million developers.
“We are innovating at every layer of the AI stack,” Pichai said in a letter to investors. “Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”
Earlier this month, it was reported that Google considered acquiring the startup Wiz for US$23 billion to strengthen its cloud security portfolio. However, Wiz decided to move forward with an initial public offering instead.
Advances in AI and search
In April, Google hit a US$2 trillion market cap and began rolling out AI Overviews in Search, powered by its large language model, Gemini. Users initially found some issues with bizarre answers, leading Google to remove them manually. Despite this, Pichai mentioned that AI Overviews have increased Search usage and user satisfaction.
This week, Google announced it is abandoning its long-delayed plans to phase out third-party cookies by default. Unlike Safari and Firefox, Google Chrome asks users to “make an informed choice that applies across their web browsing.” Pichai stated that “user choice is the best path forward” and assured continued investments in privacy-enhancing technologies while considering feedback from the ecosystem.
Advertising growth and prospects
Alphabet's other segments also saw growth. Google's advertising business grew to US$64.6 billion, while YouTube ads increased by 13 percent yearly to US$8.6 billion. The division covering subscriptions, platforms, and devices earned US$9.3 billion.
Google anticipates further growth with its upcoming hardware event in August. The event will showcase the already-revealed Pixel 9 and Pixel 9 Pro Fold, which are expected to significantly boost the company's business.
