Google has officially become a $2 trillion company, a monumental achievement that underscores the company’s resilience amidst challenging times. This milestone comes after a tumultuous year, during which Google faced significant pressure from the rise of generative AI and increased regulatory scrutiny. To adapt, Google has made dramatic shifts, including major changes to its search engine, restructuring of key teams, and the launch of its Gemini AI model.
In response to these challenges, Google executives implemented cost-cutting measures by terminating projects and laying off employees. As part of its Q1 2024 earnings announcement, Google declared its first-ever dividend and a $70 billion share buyback program, signaling confidence in its future. Investors welcomed these moves, helping Google parent company Alphabet achieve and maintain a $2 trillion market capitalization throughout a full trading day—something it briefly touched upon in November 2021. Google is now the fourth most valuable public company, trailing Nvidia ($2.2 trillion), Apple ($2.6 trillion), and Microsoft ($3.0 trillion).
Despite Mark Zuckerberg’s cautious comments about Meta’s lengthy path to monetizing generative AI, Google’s approach appears more optimistic. The company claims it is already finding ways to generate revenue from AI, like aiding advertisers in targeting users with its Performance Max tool. According to Google, these advertisers are “63 percent more likely to publish a campaign with good or excellent ad strength.”
Google’s existing businesses also continue to thrive. The Q1 2024 earnings report revealed that Google made $23.7 billion in profit on $80.5 billion in revenue—a 15% increase in revenue year over year and a 14% rise in profit compared to the previous holiday quarter, despite higher search and ad revenues during that period.
While Google initially cut over a thousand employees to boost profits, it appears that layoffs have slowed or paused. The new Q1 report shows Google spent $716 million on “severance and related charges” across January, February, and March, indicating a reduction from the $700 million spent on layoffs in January alone.
The company’s advertising and search revenue both increased by 14% year over year, with YouTube ads up nearly 21%, and “subscriptions, platforms, and devices” up by 18%, mainly driven by premium YouTube subscriptions.
Google is set to host its annual developer conference, Google I/O, on May 14th, where further insights into its future strategies are expected.
For more details on Google’s Q1 2024 earnings, check out The Verge.
