An illuminated Google logo is seen in an office building in Zurich, Switzerland.
Arnd Wiegmann | Portal
Alphabet is expected to report third-quarter results after the bell on Tuesday.
Here’s what Wall Street expects, based on a survey of analysts from LSEG, formerly known as Refinitiv:
- Earnings per share: $1.45
- revenue: $75.97 billion
Here are some other key numbers analysts are keeping an eye on:
- YouTube advertising revenue: According to StreetAccount, $7.81 billion is expected
- Google Cloud revenue: According to StreetAccount, $8.64 billion
- Traffic acquisition costs: $12.63 billion, according to StreetAccount
Google’s parent company is expected to return to double-digit revenue growth after four quarters of single-digit expansion. The company’s core advertising weakened due to the economic slowdown last year and increasing competition from TikTok.
In January, Google announced it would cut 12,000 jobs, affecting about 6% of its full-time workforce, and last month the company eliminated hundreds of positions from its recruiting organization.
In the third quarter, Google made targeted layoffs across various corporate organizations. An estimated 40 to 45 workers in the news department lost their jobs. The company also laid off more employees from its self-driving car division Waymo, which recently announced an expansion of its driverless ride-sharing service.
As the company continues to downsize after years of unbridled growth finally stalled, it is also investing heavily in artificial intelligence.
After launching OpenAI’s ChatGPT chatbot late last year, Google is looking to add generative AI technology to more products and is testing them as part of core search. Generative AI that delivers more creative and thorough answers to simple text queries could potentially have a significant impact on Google’s search and advertising business as people change the way they search for information online.
Last quarter, Google redesigned its intelligent assistant, which included layoffs as part of an effort to “supercharge” products with AI.
Sergey Brin, one of Google’s co-founders, reportedly made a rare appearance at an all-hands meeting recently and praised the company’s AI work. Earlier this month, product managers and designers at Google’s ChatGPT competitor Bard were reportedly skeptical about the tool’s usefulness.
Along with the changes in its business, Google has seen a dramatic shakeup in its upper echelons. In July, chief financial officer Ruth Porat announced she was stepping down after eight years and taking on a new role as president and chief investment officer. She told CNBC that she would also work with policymakers.
Also during the quarter, the Justice Department began an antitrust case against Google, alleging that the company perpetuated a feedback loop of restrictive standard contracts to maintain its dominance in search. Eddy Cue, Apple’s senior vice president of services, testified that it was best for consumers to have Google as the default search engine on iPhones because “there was no valid alternative.”
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