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Executive Summary:
Alphabet, Google’s parent company, reported a robust third-quarter performance with a 15% revenue increase, reaching $88.27 billion. Google Advertising rose 10.6% year-over-year to $65.9 billion, driven by a 12% gain in search revenue, totaling $49.4 billion. This growth, powered in part by AI-driven search enhancements, has attracted increased engagement among younger users, particularly those ages 18 to 34, through features like Circle to Search and the Lens visual search tool, which now handles nearly 20 billion searches, one-fourth of which show commercial intent.
YouTube remains a major contributor, with ad revenue rising to $8.92 billion, an 11% increase from the previous year. For the first time, YouTube’s combined ad and subscription revenue surpassed $50 billion over the last four quarters, fueled by popular services like YouTube TV, NFL Sunday Ticket, and YouTube Music Premium. Sundar Pichai, CEO of Alphabet and Google, highlighted enhancements like Multiview and content organization features that are designed to retain and expand YouTube’s subscriber base.
Google Cloud revenue soared 35% year-over-year to $11.4 billion, reflecting accelerated adoption of the company’s AI products. These gains came amidst ongoing antitrust challenges from the Department of Justice and competitors, yet Alphabet’s strong performance showcases its ability to innovate and maintain growth across search, YouTube, and cloud services.
