Shulou(Shulou.com)11/24 Report--

On October 26, during its third-quarter 2023 earnings call, Google and its parent company Alphabet CEO Sundar Pichai said the company may adopt a subscription model in some new artificial intelligence (AI) products.

At the conference, Morgan Stanley analyst Brian Nowak asked Google about its investments in AI search and how Wall Street should view future returns from those investments.

"Do you see examples of SGE or Bard in terms of higher utility, higher conversion rates, higher engagement," Nowak asks."Do they somehow signal that these investments might pay off? "

Pichai replied: "I am very pleased with the feedback from users on SGE and we are promoting it to more users. "

The CEO said that with artificial intelligence, Google will have the opportunity to develop search and intelligent assistant Google Assistant services in the next decade.

SGE stands for Google Search Generation Experience, a new version of search that includes generative AI capabilities. Bud is a Google chatbot designed to compete with AI research firm OpenAI's ChatGPT chatbot.

"Over time, updated paths will emerge, just like we did on YouTube," he added. "I think the subscription model is also a possible path in terms of AI work. "

That's a big deal for a company whose revenue and profits come primarily from advertising. Wall Street is nervous about any major changes to Google search, which is so lucrative. Transforming the traditional search experience into a ChatGPT-style user interface could disrupt the way these ads are displayed and executed, so Google is playing it safe.

Against this background, Pichai's willingness to use subscriptions as a possible business model for some of its emerging AI services is surprising. Perhaps the success of YouTube's subscription model emboldens the CEO. Google's video business offers YouTube TV, a cable-like service delivered over the Internet. The company also recently launched the NFL Sunday Ticket, which allows viewers to watch football games outside their local markets.

YouTube charges hundreds of dollars per season, while YouTube TV charges more than $70 per month. That's a lot of money for a company that typically offers free ad-supported Internet services. Google executives said at the earnings conference that they were pleased with the initial response to the NFL Sunday Ticket.

Google's "other bets" revenue grew 21% year-over-year in the third quarter, with YouTube subscription revenue growing particularly strongly.

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