Sundar Pichai, CEO of Alphabet, the parent company of Google, highlighted in the fourth-quarter earnings report for 2024 that the company had a strong performance, driven by its leadership in artificial intelligence and the sustained growth of its main businesses. He emphasized that Alphabet is developing, testing, and launching AI products and models faster than ever, which has allowed them to achieve significant advancements in computing and improve their operational efficiency.
In the realm of online search, Pichai mentioned that innovations like AI Overviews and Circle to Search have increased user engagement in Google Search, consolidating its position as an essential tool in the digital ecosystem. “As AI continues to expand the universe of queries people can make, 2025 will be one of the most important years for innovation in search”, he explained.
He also highlighted the substantial growth of Google Cloud, driven by increased demand for its AI-based services portfolio, which has strengthened its presence in the enterprise sector. As for YouTube, he pointed out that the platform continues to lead in streaming content and podcast viewing time, reaffirming its relevance in the digital entertainment market.
One of the most significant financial milestones mentioned by Pichai was that, by the end of 2024, the combined revenues of Google Cloud and YouTube reached approximately $115,500 million (105,000 million euros), reflecting the strength of these businesses within the Alphabet ecosystem. Additionally, he emphasized the company’s confidence in future opportunities and announced that, to accelerate its growth and consolidate its leadership in AI, Alphabet plans to invest approximately $82,500 million throughout 2025 in infrastructure, technological equipment, and other necessary investments for business growth.
Alphabet’s financial results for the fourth quarter of 2024 show solid growth in its main lines of business, with a year-over-year increase of 11.8% in total revenues, rising from $94.941 billion in 2023 to $106.116 billion in 2024.
Google Search remains the company’s largest revenue source, with growth of 12.5%, reaching $59.437 billion, thanks to improvements in its AI-based features. YouTube also experienced a significant increase of 13.8%, with advertising revenues reaching $11.520 billion, indicating greater monetization of its video and podcast platform. However, Google Network, which aggregates advertising on third-party sites, showed a slight decline of 4.1%, dropping from $9.126 billion in 2023 to $8.749 billion.
The advertising business as a whole grew by 10.6%, reaching $79.707 billion, whereas revenues from subscriptions, platforms, and devices increased by 7.8%, amounting to $12.796 billion, demonstrating greater adoption of services such as YouTube Premium, Google One, and Pixel devices.
However, the real standout in this report is Google Cloud, with a year-over-year increase in revenues of 30%, reaching $13.150 billion, confirming its growing importance in the enterprise sector and the robust demand for AI-based and cloud computing solutions. These results confirm the trend observed in the third quarter of 2024, when Google Cloud achieved a year-over-year revenue increase of 34.9%, reaching $12.540 billion.
This growth is attributed to the success of its infrastructure and enterprise platform services, notably those integrating artificial intelligence (AI) technologies. Generative AI solutions have gained popularity, enabling companies to automate processes and analyze large volumes of data, attracting both new clients and companies looking to expand their technological capabilities. This performance has consolidated Google Cloud as a key pillar for Alphabet, strengthening its position in the competitive cloud services market, dominated by companies such as Amazon Web Services (AWS) and Microsoft Azure.
According to Pichai, Google Cloud has achieved significant expansion in its AI-based solutions, attracting clients like Mercedes-Benz, Mercado Libre, and Servier. In 2024, several strategic deals were closed for over $1.100 billion, while transactions exceeding $275 million also doubled.
Furthermore, the growth was driven by its partner ecosystem, with customers acquiring billions in solutions through Google Cloud Marketplace. Vertex AI, the AI development platform, quintupled its customer base, with companies such as Mondelez and WPP building new applications with more than 200 foundational models. During 2024, its usage increased 20-fold, with high adoption of tools like Gemini Flash, Gemini 2.0, Imagen 3, and Veo.
Google also experienced growth in its database, data analytics, and AI-based cybersecurity solutions. Companies such as Radisson Hotels are using Gemini to analyze data across multiple clouds. Additionally, threat intelligence and security tools are helping Vodafone and AstraZeneca identify and mitigate risks.
In other areas of the company, the Other Bets category, which includes projects like Waymo (a technology company specializing in the development of autonomous vehicles, founded in 2009) and Verily (focused on researching, developing, and implementing data-based and advanced technology solutions to enhance healthcare), suffered a decline of 39.1%, from $722 million to $440 million, suggesting a reduced focus on these initiatives.
In terms of costs, the Traffic Acquisition Costs (TAC) increased by 6.2%, amounting to $16.333 billion, reflecting an increase in traffic acquisition costs, although to a lesser extent than the revenue growth. Google pays companies like device manufacturers (Samsung, Apple) and browsers (Mozilla) to make Google Search the default search engine in their products. For example, Apple receives billions of dollars from Google to keep its search engine as the primary option in Safari. Additionally, within the Google advertising network (Google AdSense and Google Ad Manager), the company pays website and mobile app owners to display ads on their platforms.
Finally, the number of employees remained virtually stable, increasing by only 902 employees, from 182,502 to 183,404.
Image: Flux Schnell
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