Internet Google's advertising business defies AI rivals and Trump's tariffs
Google's online advertising business has continued to grow despite competition from new AI rivals. In the past quarter, advertising revenue rose by 8.5 percent year-on-year to just under 66.9 billion dollars.
24.04.2025, 22:53
25.04.2025, 03:03
SDA
This was slightly above analysts' expectations. The share price rose by 4.6 percent at times in after-hours trading.
Advertising at Google continues to generate the majority of the parent company Alphabet's revenues. The development of the advertising business is being monitored very closely. A key question is whether attempts by competitors to use artificial intelligence to display direct answers instead of links will leave a mark on Google's search engine. Meanwhile, Google itself is moving in this direction with AI-generated overviews of search queries. These "AI overviews" currently reach 1.5 billion users per month, said CEO Sundar Pichai.
AI is also increasingly being used in another area at Google. "Significantly more" than 30 percent of the software code - the millions of lines of program code behind Google services - is now pre-formulated by artificial intelligence and taken over by humans, said Pichai. In the past, this was mainly manual work for programmers.
Temu and Shein turned off the money tap
A second factor this year is US President Donald Trump's tariff policy. In May, the exemption from import duties for parcel shipments worth less than 800 dollars will be lifted in the USA. Numerous deliveries from Chinese trading platforms such as Shein and Temu have arrived in the USA in this way to date. They used to place a lot of advertising with Google and the Facebook group Meta - but have now stopped doing so.
More profit thanks to Musk's SpaceX?
Alphabet's consolidated turnover also exceeded market expectations with an increase of twelve percent to 90.23 billion dollars. Meanwhile, profits rose by 46 percent year-on-year to 34.54 billion dollars.
There was also an unusual factor behind the strong increase in profits: the revaluation of the stake in a company not listed on the stock exchange contributed eight billion dollars, it was reported. A name was not mentioned - according to the Bloomberg financial service, this is said to be Elon Musk's space company SpaceX. According to the report, the internet company participated in a SpaceX financing round a decade ago.
Robotaxis in the fast lane
Meanwhile, Musk and Alphabet are rivals. The Tesla boss wants to launch a robotaxi service in June, initially in Austin, Texas - and Google's sister company Waymo is the top dog in the business. The self-driving cars now make more than 250,000 trips with paying passengers per week, said Pichai. Waymo only cracked the 200,000 rides mark at the end of February.
Since then, Waymo has launched on the platform of ride-hailing service provider Uber in Austin and expanded the service from San Francisco to Silicon Valley. Next year, the driverless cars are set to hit the roads in the capital city of Washington, among other places.
Competition in the starting blocks
It was only on Thursday that Volkswagen announced plans to bring self-driving cars to US roads via Uber from 2026. Musk said this week that Tesla would initially start with 10 to 20 Model Y compact SUVs in Austin. However, he always claims that most new Tesla vehicles already have everything they need to be autonomous.
This is why Musk is talking about millions of self-driving Teslas soon - and a market share of more than 90 percent in the robotaxi market. He also announced that autonomous driving would be activated for private Tesla owners in several US cities by the end of the year.
Doubts about Musk's promise
The industry and competitors are skeptical about Musk's big promises. This is because he only wants to rely on cameras and dispense with the more expensive laser radars used by Waymo, for example. This technology scans the environment and therefore provides the autonomous driving software with significantly more and more reliable information than cameras.
However, Waymo's vehicles are also considerably more expensive as a result - and this also makes it more difficult for Google's sister company to operate profitably. The company does not provide any information on Robotaxi's finances. However, the entire Alphabet division, which includes Waymo and other future bets, posted an operating loss of almost 1.23 billion dollars on 450 million dollars in revenue last quarter.
