Alphabet increases ad revenue, but still below expectations

Alphabet's fourth-quarter advertising revenue was $65.5 billion, up from $59.0 billion a year earlier but below analysts' average expectations of $66.1 billion, according to LSEG data. Alphabet shares fell 6% on the news.

Photo: Reuters

Alphabet is currently facing fierce advertising competition from other online platforms such as Facebook, Instagram, TikTok and Amazon. They also face fierce competition from two rivals in the AI ​​field, OpenAI and giant Microsoft.

Alphabet is focusing on AI and cloud services, which require huge investments in data centers and research. Its capital spending increased 45% to $11 billion, the highest in years. Alphabet CFO Ruth Porat recently said that AI investment this year will be significantly larger than in 2023.

Google is focusing on its Gemini model and its Bard chatbot to compete with OpenAI's GPT-4 and ChatGPT. It has reached a deal to invest up to $2 billion in the popular AI startup Anthropic, and is also expanding Gemini's technology to advertisers to increase revenue in Google's search business.

Alphabet's total revenue, from advertising and other areas, in the fourth quarter of 2023 reached $86.3 billion, compared with an estimated $85.3 billion, according to LSEG data.

Microsoft, Alphabet’s fiercest competitor, has been adding AI to its cloud suite, continuing to gain popularity with businesses, prompting Google to invest even more in competing tools.

Alphabet said Google Cloud revenue was $9.2 billion in the most recent quarter, while analysts expected $8.9 billion. Microsoft on Tuesday reported that sales of its cloud product, Azure, rose 30%.

Huy Hoang (according to Reuters, CNA)

Source: https://www.congluan.vn/cong-ty-me-cua-google-tang-doanh-thu-quang-cao-quyet-vung-tien-dau-tu-vao-ai-post283087.html