Current:Home > MyGoogle rebounds from unprecedented drop in ad revenue with a resurgence that pushes stock higher -Finovate
Google rebounds from unprecedented drop in ad revenue with a resurgence that pushes stock higher
View
Date:2025-04-27 20:06:24
SAN FRANCISCO (AP) — Google snapped out of an unprecedented advertising slump during its latest quarter, signaling a return to growth cycle needed to fuel investments in artificial intelligence technology that expected to reshape the competitive landscape.
The results for the April-June period released Tuesday by Google’s corporate parent, Alphabet Inc., reversed a financial downswing that had raised fears Google was losing its financial steam at the same time advances in artificial intelligence, or AI, threatened to undercut the dominant search engine that powers its digital ad empire.
But after Google’s ad revenue suffered year-over-year declines in consecutive quarters for the first time in its history, ad sales rose 3% from a year ago to $58.1 billion during the second quarter. That was better than analysts had been anticipating, according to FactSet Research.
Other news Salesforce CEO shares his predictions for AI and the future of work Salesforce founder Marc Benioff is among the few tech pioneers who is also still CEO at a groundbreaking company born in the 1990s. Amazon, Google, Meta, Microsoft and other tech firms agree to AI safeguards set by the White House President Joe Biden is praising new commitments by Amazon, Google, Meta, Microsoft and other companies to meet a set of artificial intelligence safeguards brokered by his White House as an important step toward managing the “enormous” promise and risks posed by the technology. Google says it’s developing tools to help journalists create headlines, stories Google says it is in the early stages of developing tools that use artificial intelligence to help journalists write stories and headlines. Facebook parent Meta makes public its ChatGPT rival Llama Facebook parent company Meta Platforms has built an artificial intelligence system that rivals the likes of ChatGPT and Google’s Bard but it’s taking a different approach: releasing it for free.Those gains helped lift Alphabet’s total revenue for the period by 7% from last year to $74.6 billion. The company posted a profit of $18.4 billion, or $1.44 per share, a 15% increase from the same time last year. Both those numbers also surpassed the analyst estimates that steer investors.
The Mountain View, California, company also announced that Chief Financial Officer Ruth Porat will take on the newly created role of president and chief investment officer. Alphabet will seek a new CFO to take over a job that Porat, a former investment banker, has handled for the past eight years.
Alphabet’s stock price surged nearly 10% in Tuesday’s extended trading after the results came out. The shares have climbed nearly 50% so far this year, with much of the gains since Google provided a deeper dive into its AI products and strategy during a May conference. That presentation helped alleviate concerns that Google is being outmaneuvered in a pivotal field of technology by Microsoft, which is backing and deploying some of the breakthroughs made by Open AI and its popular chatbot, ChatGPT.
“We are in a period of incredible innovation in search,” Alphabet CEO Sundar Pichai said Tuesday during a conference call he conducted from London, where he said he was visiting with the DeepMind division overseeing the company’s AI efforts.
The brewing battle for AI supremacy is expected to require billions of dollars in investments in the years to come – money that Alphabet should be able to get from Google’s advertising machine, as long as it can continue the steady growth of the past 20 years. But Google has recently been facing more daunting challenges, not only from the ChatGPT-like technology that Microsoft has been embedding in its Bing search engine, but also from Amazon in shopping, and TikTok and Reddit in hot topics.
Insider Intelligence analyst Evelyn Mitchell-Wolf said the past quarter showed Google remains on “the high ground. All it has to do now is keep increasing revenues while executing its carefully-laid plans to lead advertisers and consumers into the AI-powered future without any catastrophes.”
After YouTube saw its ad sales fall year-over-over in three straight quarters as TikTok’s audience swelled, Google’s popular video site also bounced back with a 4% increase in ad revenue from last year. Meanwhile, the Google Cloud division that provides the behind-the-scenes technology for a wide swath of websites posted a 28% increase in revenue from last year. The Cloud division also posted its second consecutive profitable quarter in a development that has pleased investors.
Porat’s promotion signaled Alphabet is looking to pare the losses in its long-unprofitable “Other Bets” division that includes self-driving car pioneer Waymo and other far-flung projects working on technology expected to take many years to yield a return. When she takes on her new role as Alphabet’s president, Porat will oversee the Other Bets portfolio as part of a commitment to “drive financial discipline and returns for shareholders, while spearheading investment to create sustainable, long-term value,” Pichai said in a statement.
veryGood! (263)
Related
- Military service academies see drop in reported sexual assaults after alarming surge
- Rapper G Herbo pleads guilty in credit card fraud scheme, faces up to 25 years in prison
- Rangers, Blue Jays bolster pitching as St. Louis Cardinals trade top arms in sell-off
- YouTuber Who Spent $14,000 to Transform Into Dog Takes First Walk in Public
- Trump suggestion that Egypt, Jordan absorb Palestinians from Gaza draws rejections, confusion
- Bear takes dip in backyard Southern California hot tub amid heat wave
- Churchill Downs to improve track maintenance, veterinary resources for fall meet after horse deaths
- Magnus White, 17-year-old American cyclist, killed while training for upcoming world championships
- Selena Gomez's "Weird Uncles" Steve Martin and Martin Short React to Her Engagement
- Cycling Star Magnus White Dead at 17 After Being Struck By Car During Bike Ride
Ranking
- Sam Taylor
- Tim McGraw Slams Terrible Trend of Concertgoers Throwing Objects At Performers
- Tim McGraw Slams Terrible Trend of Concertgoers Throwing Objects At Performers
- NASA reports unplanned 'communications pause' with historic Voyager 2 probe carrying 'golden record'
- All That You Wanted to Know About She’s All That
- Here's Your First Look at Vanderpump Rules Star Tom Sandoval's New Reality TV Gig
- Lady Gaga honors Tony Bennett in touching post after death: 'Will miss my friend forever'
- Idaho mom Lori Vallow Daybell faces sentencing in deaths of 2 children and her romantic rival
Recommendation
Why we love Bear Pond Books, a ski town bookstore with a French bulldog 'Staff Pup'
Pennsylvania schools face spending down reserves or taking out loans as lawmakers fail to act
French embassy in Niger is attacked as protesters waving Russian flags march through capital
Tim McGraw Slams Terrible Trend of Concertgoers Throwing Objects At Performers
Are Instagram, Facebook and WhatsApp down? Meta says most issues resolved after outages
NASA reports unplanned 'communications pause' with historic Voyager 2 probe carrying 'golden record'
Mike Huckabee’s “Kids Guide to the Truth About Climate Change” Shows the Changing Landscape of Climate Denial
Yes, heat can affect your brain and mood. Here's why