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Stock crash, sentient AI, racial workplace biases, Pixel watch, lawsuits, and layoffs are the ingredients that headlines about Google in 2022 were made of.
On the tech side? Not much!
Google’s parent company, Alphabet, witnessed a crash in its stock amounting to nearly 25% in the first half of 2022. Additionally, the tech giant also joined the ‘layoff’ trend in November as reports suggested that the company is letting go of 10,000 of its underperforming employees.
During the same period, Google also agreed to pay a whopping USD 391.5 million in settlement for misleading users with regard to location tracking.
Considering all the developments in 2022, it would be fair to say that Google had a, more or less, uneventful year. Let’s delve in further.
Google AI
In terms of AI, the highlights of 2022 would definitely include OpenAI’s DALL-E2, Stability AI’s Stable Diffusion along with OpenAI’s chatbot, ChatGPT.
When it comes to Google, the highlight this year is likely to be the LaMDA fiasco, where Blake Lemoine, an engineer who worked with Google’s Responsible AI team, was fired for claiming that LaMDA AI was sentient.
Google, often seen as a leader in the context of AI along with the other big tech firms, has also developed its own text-t0-image AI model called Imagen. However, unlike DALL-E2 and Stable Diffusion, the model is still not accessible. Stability AI, on the contrary, has open sourced Stable Diffusion.
The biggest development for Google came from DeepMind, a company owned by Alphabet. Earlier this year, the London-based AI firm predicted nearly all the protein structures known to science. DeepMind said that its AlphaFold programme expanded its open online database to include more than 200 million protein structures.
Revenue
In 2021, Google made around USD 257.63 billion in revenue, a significant increase from the USD 182.53 billion that they made in 2020. Much like previous years, this year too, Google continues to generate a major chunk of its revenue from advertising.
In the third quarter of 2022, Google reported a revenue of around USD 69 billion and around USD 13.9 billion in profits. Revenues in Q1 and Q2 stood at USD 69.7 billion and USD 68.01 billion, respectively.
In Q3, Google reported a drastic decline in its overall revenue growth from 41% a year ago to 6%. Advertising revenue from YouTube also declined 2% year-over-year to $7.07 billion.
Notably, it was the first time YouTube’s ad revenue shrank on a year-over-year basis since Google started declaring YouTube’s revenue on a quarterly basis.
To get a broader picture of Google’s revenue in 2022, we will have to wait a bit longer. However, with advertisers cutting their budget short, Google’s revenue is expected to take a hit in 2022.
Cracks begin to appear?
Besides, for the first time since its inception, Google might have a serious competitor. Senior Vice President–Google, Prabhakar Raghavan, while speaking at Fortune’s Brainstorm Tech conference, revealed that nearly 40% of young users between ages 18 and 24 in the US preferred to use ‘TikTok’ or ‘Instagram’ over ‘Google Maps’ or ‘Google Search’ when looking for a restaurant.
Tiktok is also redefining social media to the extent that YouTube recently introduced ‘Shorts’—a short-form video-sharing platform similar to TikTok—to revive its user engagement.
Google started out as a search engine, and today, the tech giant is facing a threat that could possibly change how one searches for information over the web.
Further, OpenAI’s conversational chatbot, ChatGPT, which took the internet by storm, was also labelled by many as the ‘Google Killer’ because of its ability to answer complex queries instantaneously. Many are of the opinion that if ChatGPT is allowed to connect to the internet, it could possibly be what ultimately brings about the demise of Google Search.
While Google could see these developments as mere speculation and believe that it might not have much impact on their business or profitability, it could be argued that 2022 might well have been the year cracks began to appear in Google’s armour for the first time.
What to expect in 2023?
Earlier this year, in an email to his employees, Alphabet CEO Sundar Pichai said that the tech giant will slow down hiring as well as investment in 2023. Pichai cited economic headwinds as the reason.
Google will also retire Universal Analytics. The tech giant announced earlier this year that it will stop processing new hits on July 1, 2023. Along similar lines, Google will also discontinue its dedicated Street View app on Android from March 31, 2023, according to 9To5Google.
When it comes to AI, Pichai said that 2023 will mark a “point of inflection” for the way AI is used for conversations and in search. Google announced LaMDA in 2021, which implies that they possess the technology to compete with ChatGPT.
With many Googlers worried about the company being left behind in terms of AI and innovation, we could expect some notable developments in this field from Google’s end.
In the revenue front, Google is expected to continue generating a major chunk from ads; however, the share of revenue from Google Cloud could be expected to increase in 2023.
