Alphabet’s core business remains advertising, which accounted for more than three-quarters of its revenue in Q3 2024. The company continues to innovate in advertising, introducing new ad experiences on platforms like Search and YouTube. Alphabet is integrating artificial intelligence (AI) into its products and services to enhance user experience, improve response times, and drive revenue growth. The company’s focus remains on connecting users with relevant advertisers, products, and services.
Alphabet had a good third quarter in 2024 as its consolidated revenue increased 15.1% year-on-year (or 16% in constant currency) to US$88.3 billion. The company is seeing momentum across all its products and platforms, driven by its focus on innovation and AI.
Alphabet is making significant investments in infrastructure to support its AI initiatives. This includes building data centres, developing AI chips, and expanding its global fibre network. In Q3 2024, the company invested over US$7 billion in data centres, primarily in the U.S. Overall, Alphabet invested US$13 billion in its technical infrastructure during the quarter, with a focus on server upgrades, data centres, and networking equipment. Similar levels of investment are anticipated in Q4 2024.
Alphabet’s costs increased due to a US$607 million charge to optimise its global office space as well as the significant infrastructure investments mentioned. This involved restructuring AI teams and moving the Gemini app team to Google DeepMind to accelerate development. Additionally, higher YouTube’s traffic acquisition costs, higher R&D expenses and depreciation costs associated with increased infrastructure investments contributed to increased costs. Furthermore, the early launch of Google devices in the third quarter led to higher hardware, sales, and marketing costs.
The company is streamlining its cost base through headcount management, facilities optimisation, and process efficiency improvements, which will positively impact its bottom line. For instance, over 25% of new code at Google is created by
