• by Laurie Sullivan  @lauriesullivan, January 30, 2024

Alphabet reported double-digit revenue growth during last year’s final quarter. Fourth-quarter revenue rose 13% to $86.3 billion, beating the Street’s expectations of 12% growth, while operating income jumped 30% to $23.7 billion.

The results, announced Tuesday, linked several consecutive quarters of revenue growth for Google with most of the sales coming through search and online advertising.

“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud,” Google CEO Sundar Pichai said in the earnings report, adding that investments in artificial intelligence (AI) drove the increase.

“As we enter the Gemini era, the best is yet to come,” he said.

Gemini is Google’s family of AI models that can understand and communicate through many types of prompts such as text, images and audio.

During the earnings call, Pichai said generative AI (GAI) will fold into search, and AI tools will be tailored to boost long-term advertising sales in the new search experience.

Google advertising revenue rose 11% to $65.5 billion in Q4, while Google Search and Other rose 12.7% to $48.02 billion, but came in slightly lower than analysts’ estimates of $48.1 billion.

YouTube ads rose 15.5% to $9.2 billion, while Google subscriptions, platforms and devices rose 22.7% to $10.79 billion. Google Cloud rose 25.7% to $9.19 billion.

Percentage-wise, the real winner was “Other Bets,” which rose 191% to $657 million.

Google Network fell 2.1% to $8.3 billion.

Alphabet also reported that for 2023, it took charges related to employee severance of $2.1 billion, with $1.2 billion in exit charges for the last three months of the year.