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    • Google’s money-making machine still makes huge profits despite threats
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    Google’s money-making machine still makes huge profits despite threats

    Harry Posted on

    By Michael Liedtke
    | Associated Press

    SanFrancisco – Google is still evolving as the company makes a major shift to artificial intelligence and battles regulators trying to topple its internet empire.

    The latest evidence of Google’s prosperity emerged Tuesday when its corporate parent, Alphabet Inc., announced its results for the July-September period. Both Alphabet’s profits and revenue grew faster than industry analysts expected, thanks to the money-making machine powered by Google’s ubiquitous search engine.

    Alphabet earned $26.3 billion, or $2.12 per share, in the latest quarter, up 34% from a year earlier. Revenue rose 15% to $88.27 billion compared to the same period last year.

    “Our commitment to innovation, as well as our long-term focus and investment in AI, is paying off,” Alphabet CEO Sundar Pichai said during a call discussing the results.

    The profits would be even higher if Google hadn’t spent so much money building up its AI arsenal in a technological arms race that also includes Microsoft, Amazon, Apple, Facebook’s major Meta Platforms and rising star OpenAI. Investments in artificial intelligence are the main reason why Google’s capital expenditures last quarter increased by 62% compared to the same period last year, reaching $13.1 billion.

    AI spending will likely remain flat in the current October-December period, with an even higher increase next year, according to Alphabet’s finance chief Anat Ashkenazi. But Ashkenazi also stressed that the Mountain View, California-based company will act on cost-cutting opportunities in other areas to help boost profits. Alphabet reduced its payroll from more than 190,000 employees worldwide early last year to about 181,000 workers now.

    As an example of how AI can perform tasks that once required human brainpower, 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 emerged and the conference call concluded.

    Investing.com analyst Thomas Monteiro said Alphabet’s showing suggests there will be better news for Big Tech as this week progresses, while quarterly reports from Microsoft, Meta, Amazon and Apple will continue to arrive in the coming days.

    But a 4-year-old antitrust lawsuit filed by the US Department of Justice has cast a cloud of uncertainty over Google’s future.

    More: US considers asking court to dissolve Google as it weighs remedies in antitrust case

    After considering evidence presented during a high-profile hearing last year, a federal judge declared Google’s search engine an illegal monopoly; This decision opened the door to a big shock. Earlier this month, the Justice Department suggested it might seek to break up Google under penalties that U.S. District Judge Amit Mehta determines next summer.

    Along with the legal attack on the search engine, Google has also been ordered to break down barriers protecting the Play Store for Android smartphone apps. The decision came earlier this month after a jury ruled that the operation was also an illegal monopoly. Google is also nearing the end of another antitrust lawsuit in Virginia that revolves around the technology underlying its digital ad network.

    As if regulatory headaches weren’t enough, Google is also in the midst of a major shift in its search engine, with an increasing emphasis on featured results generated by artificial intelligence in response to competitive threats to alternative options that rely on the same potential. Revolutionary technology.

    At least for now, Google remains a juggernaut.

    Digital ads tied to Google’s search engine remained the financial cornerstone. Revenue from this segment increased by 12% compared to the previous year, reaching $49.39 billion. Thanks to the demand for artificial intelligence services, Google’s cloud division is growing at an even stronger pace. The cloud division generated $11.35 billion in revenue last quarter, up 35% from last year.

    However, the regulatory questions that plague Google continue to cause concern among investors. Although Alphabet’s shares are up more than 20% so far this year, Tuesday’s closing price of $169.68 remains well below the high of about $192 it reached in July, before the search engine monopoly decision was made.

    Harry
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