Google’s AI investments paid off in Q4

If we had a dollar for every time executives and analysts mentioned AI during Alphabet’s Q4 earnings call on Tuesday, we’d have about…$90, according to a transcript of the call.

Though the tech giant’s ad revenue fell short of analyst expectations—and its stock price was down 6% as of 10am Wednesday—Google’s advertising business, bolstered by its investments in AI and live sports, grew to $65.5 billion last quarter, up 11% year over year. YouTube alone earned $9.2 billion in ad revenue in the quarter, up almost 16% YoY.

However, according to CNBC, analysts had anticipated Alphabet would bring in $65.9 billion in total ad revenue.

The long and short: On a call with investors, SVP and chief business officer Philipp Schindler touted growth in YouTube Shorts, whose total creator earnings have increased every month since the company introduced revenue sharing for creators in February 2023. Shorts are averaging 70 billion daily views, Schindler said, and more than 2 billion logged-in users are watching Shorts every month.

Beep, boop: Schindler touted Google’s other AI investments, including use of the tech in measurement and bidding capabilities. Recently, Google also introduced other AI-powered ad tools, including Demand Gen and search ads supported by its Gemini AI model.

Play ball: The company remained tight-lipped about the results of its decision to bring NFL Sunday Ticket to YouTube TV. Schindler did say, however, that more than 90 upfront and scatter advertisers, including Unilever, have partnered with YouTube to advertise around the football programming. Total revenue from subscription products, driven mostly by YouTube, hit $15 billion in 2023.

Ups and downs: Schindler also addressed downsizing on Google’s ad sales team, which recently laid off a few hundred people amid widespread cuts at the company.

“We’re not restructuring because AI is taking away roles,” he said. “But we see significant opportunities here with our AI-powered solution to actually deliver incredible ROI at scale, and that’s why we’re doing some of those adjustments.”