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    • Google’s money-making machine continues to generate huge profits despite threats
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    Google’s money-making machine continues to generate huge profits despite threats

    Umito Posted on

    By Michael Liedtke
    | Associated Press

    San Francisco – Google continues to thrive as the company navigates a crucial transition to artificial intelligence and battles regulators trying to topple its internet empire.

    The latest evidence of Google’s prosperity came Tuesday with the release of its parent company Alphabet Inc.’s earnings for the July-September period. Alphabet’s profits and revenue have grown at a faster pace than industry analysts expected, largely thanks to a money-making machine powered by Google’s ubiquitous search engine.

    Alphabet earned $26.3 billion, or $2.12 per share, in the most recent quarter, an increase of 34% from last year. Revenue increased 15% from the same period last year to $88.27 billion.

    “Our commitment to innovation and our long-term focus and investments in AI are paying off,” Alphabet CEO Sundar Pichai said in a call to discuss the results.

    Profits would have been even higher if Google hadn’t invested so much money developing its AI arsenal in a tech arms race that includes other industry heavyweights Microsoft, Amazon, Apple, the parent meta-platforms of Facebook and the rising star OpenAI. Investments in AI are the main reason Google’s capital spending in the most recent quarter soared 62% from the same period last year, to $13.1 billion.

    AI spending will likely stay around the same level during the current October-December period, and increase even more next year, according to Anat Ashkenazi, Alphabet’s chief financial officer. But Ashkenazi also stressed that the Mountain View, Calif., company would seize cost-cutting opportunities in other areas to help boost profits. Alphabet has already reduced its payroll from more than 190,000 employees worldwide early last year to around 181,000 today.

    In one example of how AI can perform tasks that once required human brain power, Pichai said the technology now writes more than 25% of the company’s new computer coding.

    Investors seemed pleased with both the performance and what they heard from company executives. Alphabet’s stock price rose 5% in extended trading after the numbers were released and the conference call ended.

    Investing.com analyst Thomas Monteiro said Alphabet’s results suggest more good news is coming for big tech as the week progresses, with quarterly reports from Microsoft, Meta, Amazon and Apple still to come in the coming days.

    But an antitrust case brought four years ago by the U.S. Department of Justice casts a cloud of uncertainty over Google’s future.

    More: US plans to ask court to break up Google as it weighs solutions in antitrust case

    After weighing evidence presented in a high-profile trial last year, a federal judge ruled that Google’s search engine constituted an illegal monopoly — a ruling that opened the door to a major upheaval. Earlier this month, the Justice Department suggested it could seek to break up Google as part of sanctions to be determined by U.S. District Judge Amit Mehta next summer.

    In addition to the legal attack on its search engine, Google was also ordered to remove barriers protecting its Play Store for Android smartphone applications. The ruling came earlier this month after a jury decided the operation also constituted an illegal monopoly. Google is also nearing the end of another antitrust trial in Virginia over the technology behind its digital advertising network.

    As if regulatory issues weren’t enough, Google is also in the midst of a major overhaul of its search engine that places an increasing emphasis on results produced by artificial intelligence in response to competitive threats to alternative options relying on the same search engine. revolutionary technology.

    For now, at least, Google remains a heavyweight.

    Digital ads linked to Google’s search engine remain the financial cornerstone. Revenue in this segment increased 12% year-over-year to $49.39 billion. And Google’s cloud division is growing even faster, thanks to demand for AI services. The cloud division generated $11.35 billion in revenue last quarter, a 35% increase from last year.

    But regulatory issues hanging over Google remain a concern among investors. Although Alphabet shares have surged more than 20% since the start of the year, Tuesday’s closing price of $169.68 remains well below the high of nearly $192 reached in July before the publication of the decision on the search engine monopoly.

    Umito
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