Wahab Khan 
Google missed analysts’ expectations as its earnings came in softer than expected. The numbers appear as the company makes an effort to diversify its revenue generation to address its dependence on search. According to the first-quarter revenue report posted by Google parent Alphabet, the company failed to spot revenue in the middle of other earnings.
The report highlights $68 billion in revenue in sales, which is slightly lower than the $68.1 billion anticipated by Yahoo Finance analysts’ survey. It showed a total earning of $24.62 per share, which goes below the anticipated revenue of $25.94.
Lower Revenue Than Anticipated
Google found a lower anticipated outcome as it tried to diversify its earnings, in an effort to address its dependency on search. The tech giant is known for controlling more than ninety percent of the entire search market. It sells ads against search and keyword results to generate significant revenue.
Google keeps making efforts to diversify its revenue. It has decided to expand its cloud computing services as part of its effort. Google cloud computing services have tough competition with Microsoft’s Azure and Amazon’s AWS. The company could boost its revenue for cloud by more than forty percent to $5.82 billion year over year, though it faces loss at the narrowed unit.
Earnings through Advertising
Google continues to earn from advertising. However, the softening international economy likely grew weaker in the ad marketplace, reflecting on overall returns. According to the company, the board had approved a share buyback, pledging to buy an extra $70 billion in shares again. Google also faced a stock fall of 2.8% in after-hours trading to $2,324.00.
Ruth Porat, CFO, told analysts Google had aggressive growth over the quarter through investments in data centers and employee recruitment. The company hired about 24,000 individuals by the end of the first quarter.
The number of recruited employees was significantly greater than the workforce Google hired last year. Sales and marketing were also the areas where the company spent lots of money. Google and several other companies exited Russia after it attacked Ukraine. According to Porat, Google would earn about 1% of its revenue from Russia, which is no longer the case.
YouTube Shorts
Executives drew analysts’ attention to YouTube Shorts launched by TikTok in 2021. Sundar Pichai, the CEO, thinks YouTube shorts would generate thirty billion daily views. The video streaming platform encourages creators to come up with creative videos for YouTube with a $100m fund. TikTok still enjoys the dominating position in the video market, especially when it comes to short-form clips. It is a reputation the company perhaps needs time to cede.
Google Play
Google has a significant portion of revenue from its Play App. It has recently brought a “Data Safety”, which aims to help users understand privacy and safety guidelines before downloading an app. It shows how apps collect, secure, and share users’ data. The company announced “Data Safety” in July, covering first-party and third-party developers. The feature works as same as Apple’s nutrition labels do for apps.
