Alphabet, Google’s parent company, reported impressive revenue growth in its latest quarter, showcasing the strength of its search engine and video platform, YouTube. Despite recent fluctuations in the digital advertising industry, Alphabet reported $80.5 billion in quarterly sales, a 15 percent increase from the previous year, surpassing analysts’ estimates.
Profit also saw a significant jump, climbing 36 percent to $23.7 billion, well above the expected $18.9 billion. In a surprising move, Alphabet announced its first-ever dividend of 20 cents per share, to be paid on June 17, along with a $70 billion share repurchase program. This news caused Alphabet shares to rally 13 percent in after-hours trading.
The success of Alphabet can be attributed to the resilience of Google’s search engine, which has remained a key gateway to the internet for billions of users. Despite challenges in the industry, Google has continued to dominate the online advertising space, generating billions in profit each year.
Alphabet has also been investing heavily in generative artificial intelligence, competing with tech giants like Microsoft and OpenAI. The company spent $11.9 billion on research and development in the first quarter alone, a 4 percent increase from the previous year.
However, Alphabet faced a setback with its A.I. ambitions when users discovered issues with its Gemini chatbot, which generated inaccurate images of historical figures. Google executives have vowed to address the problem and have temporarily paused the chatbot’s image generation feature.
To support its A.I. initiatives, Alphabet has been cutting costs, including laying off employees in various business units. As of March 31, the company had 180,895 employees, down from 182,502 three months earlier and nearly 10,000 fewer than a year ago.
Despite these challenges, Alphabet’s YouTube platform saw a 21 percent increase in advertising sales, reaching $8 billion in the first quarter. Google Cloud, the company’s cloud computing unit, also reported strong sales growth, increasing by 28 percent to $9.6 billion.
Overall, Alphabet’s strong performance in the latest quarter demonstrates its ability to navigate the ever-changing digital landscape and maintain its position as a leader in the tech industry.
