Google parent Alphabet's chief executive Sundar Pichai on April 25 said that YouTube and Google's cloud business is expected to reach a combined annual run rate of over $100 billion by the end of 2024, highlighting new money-spinners for the search giant.
"This shows our track record of investing in and building successful, new, growing businesses," Pichai said during the company's earnings conference call.
YouTube reported $8.1 billion in ad sales for the first quarter ended March 31 this year, registering its highest Q1 revenue till date. This was up 21 percent year-on-year (YoY) from $6.7 billion revenue in Q1 of 2023. This figure does not include YouTube's subscription revenue.
Google's overall revenue from its subscriptions, platforms and devices business, which includes YouTube Premium and YouTube TV, generated $8.7 billion revenue during the quarter, registering a 17.9 percent increase from $7.4 billion in Q1 2023.
Alphabet's chief business officer Philipp Schindler said the revenue increase was driven by strong growth in YouTube subscriptions.
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The tech giant does not provide a break-up of its subscription, platforms and devices unit but Pichai said in January that Google's subscription business generated $15 billion in revenue in 2023.
YouTube also announced that it crossed more than 100 million paid subscribers across YouTube Premium and YouTube Music as of January 2024, up from 80 million in November 2022. YouTube TV, a television streaming service available in the United States, has more than eight million paid subscribers.
Meanwhile, Google One, the company's cloud storage subscription service, hit 100 million subscribers in February, Pichai said on February 9.
In recent years, Google has taken many steps to drive its subscription growth. YouTube launched a global initiative to crack down on ad blockers in October 2023, which it extended to third-party apps as well earlier this month. Google Photos also ended its free unlimited storage in June 2021.
In February, the search giant also brought many of its cutting-edge generative AI features under a new Google One AI Premium Plan.
In India, the plan is available at a monthly fee of Rs 1,950 and offers subscribers access to an advanced version of its chatbot Gemini - called Gemini Advanced - designed for highly complex tasks and powered by AI model Gemini Ultra 1.0.
Subscribers will also get access to Gemini's capabilities in the Alphabet's productivity apps such as Gmail, Docs, Slides, Sheets and Meet.
Google's cloud unit saw its revenue jump by 28.4 percent to $9.6 billion for the quarter, from $7.45 billion revenue in Q1 2023. Operating income rose to $900 million in Q1 2024, from $191 million in Q1 2023.
Pichai said that strong performance in YouTube and Google Cloud, along with its flagship search business, led the company's overall revenue growth during the quarter.
Alphabet reported revenue of $80.5 billion for the quarter, up 15 percent YoY, from $69.8 billion revenue in Q1 2023.
Operating income grew 46.3 percent to $25.5 billion for the quarter, from $17.4 billion in Q1 2023. Net income jumped by 57 percent to $23.7 billion in Q1 2024, from $15.1 billion in Q1 2023.
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