Turns out the digital advertising apocalypse was greatly exaggerated. Alphabet just dropped its Q1 earnings report, and let me tell you – Google's parent company isn't just surviving in this economy, it's absolutely feasting.
The tech behemoth reported a stunning $90.23 billion in revenue, sailing past analyst expectations of $89.12 billion. But the real jaw-dropper? Those earnings per share: $2.81 versus the predicted $2.01. That's not just beating estimates; that's taking them out back and teaching them a lesson they won't soon forget.
I've been covering tech earnings for years, and there's something almost comical about how Wall Street keeps underestimating Google's money-printing capabilities. It's like watching Charlie Brown run up to kick that football, only to have Lucy (played by Alphabet CFO Ruth Porat) yank it away at the last second. Every. Single. Quarter.
The breakdown tells an interesting story. YouTube ads pulled in $8.97 billion – remember when everyone thought TikTok would be the death of YouTube? Ha! – while Google Cloud generated a hefty $12.27 billion. That cloud number deserves a double-take. For a business segment once dismissed as a pricey side project, it's now making more money quarterly than entire companies like Netflix or eBay.
And then there's the $13.66 billion in traffic acquisition costs – the fancy term for what Google pays to stay the default search engine on your devices. Think of it as a protection racket, but for search queries. "Nice browser you got there. Be a shame if someone made you type in 'www.google.com' manually..."
What's particularly fascinating about these results (at least to this tech reporter) is how they fit into the current Silicon Valley narrative. While every startup founder and their venture capitalist uncle has been shouting "AI!" from the rooftops, Alphabet has quietly been... well, making money. Lots of it.
Look, I'm not saying Google isn't investing in artificial intelligence – Gemini is proof they're in that game for real. But unlike some companies that shall remain nameless (cough, Meta, cough), Google doesn't need to rebrand its entire existence around the latest buzzword. They've got that search advertising cash cow, and she's still producing premium milk.
The company's approach reminds me of what a former Google exec once told me over coffee: "We're boring on purpose." At the time, I thought it was false modesty. Now I see it as perhaps the most brilliant strategy in tech.
Google's business model is almost laughably simple. Step 1: Be where people look for information. Step 2: Sell ads against those searches. Step 3: Use the ridiculous profits to fund everything from cloud infrastructure to self-driving cars to... whatever the heck they're doing with balloons in the stratosphere.
(Speaking of which, whatever happened to those internet balloons? Another moonshot quietly deflated, I suppose.)
The YouTube numbers deserve special attention. $8.97 billion is serious money in video land. The platform has managed something remarkable – maintaining its position as the default video repository for humanity while simultaneously fending off specialized challengers like TikTok and Twitch. They've borrowed features when needed (Shorts), kept creators mostly happy, and continued to be the place where people go to learn how to fix their dishwasher or watch old NBA highlights at 3 a.m.
Can they keep this up? The regulatory headwinds are real. Antitrust concerns aren't going away. And yet... I wouldn't bet against them. Not with this management team and certainly not with this balance sheet.
For investors, the message seems clear. In uncertain times, there's something deeply reassuring about a company that can generate cash like it's discovered an actual money tree in the backyard of its Mountain View campus.
As one analyst put it to me after the numbers dropped: "Google is basically a public utility at this point. When's the last time you went a day without using one of their products?"
Hard to argue with that logic. Or these numbers.
