Amid mounting competition and significant investments in AI integration across various products, Google's core business remains robust. Despite challenges, Google's advertising sector continues to thrive.
Google Wants Formats Tailored to SGE's Workings
However, the critical question is how Google's concentrated efforts in AI will influence this foundational business. During Google's earnings call, the company's CEO Sundar Pichai mentioned the company's intention to experiment with new formats tailored to the way Search Generative Experience (SGE) works.
Google has already presented some conceptual ideas, hinting at potential debuts in the near future. Philipp Schindler, Google's chief business officer, emphasized the importance of allowing advertisers to engage with potential customers during their search journeys in this new experience.
Google's AI-powered SGE remains an opt-in feature, and the full extent of its impact on the company's advertising domain remains to be seen. As SGE is progressively introduced, Google focuses on ensuring a smooth product launch, creating value for its ecosystem, and facilitating a seamless transition for ads.
Pichai views the integration of AI in search as a long-term endeavor, foreseeing an opportunity to reshape search and Assistant in the decade ahead. The Verge reported that this suggests that Google has started thinking seriously about making its AI-powered search more of a business.
While introducing SGE, Pichai affirmed that they are diligently ensuring that the product performs optimally and delivers value to the ecosystem while maintaining a smooth transition for ads.
Read Also : Google Launches Tool for Web Publishers to Opt out of Data Training for Bard, Other AI Models
Google Envisioning Transformation for Search, Assistant
Google's strategic integration of AI into its search functionality is a long-term endeavor. Pichai envisioned a decade of transformation for search and Assistant.
According to his previous statement, SGE was poised to become the standard for how search operates. Moreover, the company is demonstrating a growing commitment to making AI-powered search a core part of its business, evident from the discussions about ads during the recent earnings call.
In addition to these developments, the results showed that other segments of Google's business are thriving. YouTube ads, for instance, recorded a revenue of $7.9 billion, marking a more than 12 percent increase from the previous year.
Google is also enhancing its popular video service with various AI tools, including the introduction of features like "Dream Screen," which enables creators to incorporate AI-generated images and videos into Shorts.
Furthermore, Google's cloud business is flourishing, with revenues of $8.4 billion, signifying a 22 percent growth compared to Q3 2022. This division offers AI services that cater to customers seeking AI solutions for their applications and products.
During Alphabet's third-quarter earnings on Tuesday, Google left one significant question unanswered: who will be CFO Ruth Porat's successor?
In the second quarter earnings announcement, Alphabet revealed that Porat would take on the roles of president and chief investment officer of both Alphabet and Google. These responsibilities encompass overseeing Alphabet's "Other Bets" investments.
No successor was named at that time, and this information has remained undisclosed. However, Porat suggested on Tuesday's call that there may be some changes to "Other Bets" down the line.
She mentioned that across the portfolio of "Other Bets" companies, they have been working to identify opportunities to create sharper focus and to operate more efficiently and effectively. This statement hinted at the likelihood of forthcoming adjustments in Alphabet's "Other Bets" investments.
