Google’s parent company Alphabet’s advertising sales came in below expectations and the company said its spending on items such as servers to power artificial intelligence would jump this year, Reuters reported.
Alphabet’s search and video juggernauts Google and YouTube faced competition for ad budgets from other online platforms, including Facebook, Instagram, TikTok and Amazon.
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The company recorded ad revenue of $65.52 billion in the fourth quarter, compared with $59.04 billion a year earlier. Analysts on average expected ad revenue of $66.06 billion, as per the report.
Revenue for the quarter ended Dec 31 stood at $86.31 billion, compared with estimates of $85.33 billion, according to LSEG data.
“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come,” said Alphabet CEO Sundar Pichai. Google launched Gemini, its new AI model, last month, raising optimism about the company’s ability to be a strong competitor for OpenAi’s ChatGPT.