Alphabet Inc. (NASDAQ:GOOG) Q4 2022 Earnings Call Transcript

Philipp Schindler: Yeah. Thank you so much for the question. We think there is a lot of great opportunities to differentiate the user and creator experience, with our unique capabilities. It basically means that, every YouTube viewer, who is interested in the NFL can now have one-click access to the full offering of Sunday Ticket, as an add-on package on YouTube TV subscription, and as a stand-alone offering on Primetime Channels. This will be the first time that Sunday Ticket is actually available a la carte for fans. On YouTube TV, we’re building the ability for subscribers to, for example, watch multiple screens at once. And on YouTube CTV, we’ll be adding new features specific to the Sunday Ticket experience like comments, chats, polls, and so on.

On the creator side, imagine all the innovative ways they can create with exclusive NFL content, behind-the-scenes event access and so on. And we’re really excited to see, what they’ll do across long-form, shorts, live streams and more. On your second question, on the Shorts side, as I said earlier, viewership is growing rapidly, 50 billion-plus daily views, up from 30 billion last spring. We’re still pleased with our continuing progress in monetization. Closing the gap between Shorts and long-form is a big priority for us, as is, of course, continuing to build a great creator and user experience, which we’re paying a lot of attention to. As on Shorts are now available, it gives you a bit of a sign for the progress. We have video action, app discovery, Performance Max campaigns and via product feed shorts are also shoppable.

And again, we’re the only destination where creators can produce all forms of content, across multiple formats, across multiple screens and really with multiple ways to make a living. And Sundar shared just yesterday, we brought revenue sharing to Shorts via our YouTube Partner Program. Ultimately, our goal is to make YouTube the best place for Shorts and creators. And that’s really what our focus is at the moment.

Operator: And our next question comes from Douglas Anmuth with JPMorgan. Your line is open.

Douglas Anmuth: Thanks for taking the questions. One for Sundar and one for Ruth. For Sundar, can you just talk more about how you can bring the AI products to market with the principles and integrity that you talked about and how you can do that without kind of sacrificing quality or trust along the way? And then, Ruth, clearly, the language around reengineering the cost structure in a durable way and everything that went along with it is different than what we’ve heard in the past. Is there any way at all to help us quantify how you’re thinking about these efforts? Thanks.

Sundar Pichai: Thanks, Doug. On the AI side, it is a really exciting time. I think we’ve been investing for a while, and it’s clear that the market is ready. Consumers are interested in trying out new experiences. I think I feel comfortable with all the investments we have made in making sure we can develop AI responsibly. And we’ll be careful. We’ll be launching — we’ll — more as labs products in certain cases, beta features in certain cases and just slowly scaling up from there. Obviously, we need to make sure we’re iterating in public, these models will keep getting better, so the field is fast changing. The serving costs will need to be improved. So I view it as very, very early days, but we are committed to putting our experiences, both in terms of new products and experiences, actually bringing direct LLM experiences in Search, making APIs available for developers and enterprises and learn from there and iterate like we’ve always done.

So I’m looking forward to it.