Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) CEO Sundar Pichai has expressed confidence in the company's ability to manage the costs associated with the new search experience, which includes generative answers.
What Happened: During the first-quarter earnings call on Thursday, Pichai addressed the changes in user behavior and the potential impact on the new Search experience given the integration of generative answers.
The CEO also addressed concerns about the potential costs of serving these queries, latency, and monetization, expressing confidence in the company's ability to manage these challenges.
"People question whether these things would be costly to serve, and we are very, very confident we can manage the cost of how to serve these queries," he said for new search experience.
This announcement comes on the heels of Google's strong first-quarter earnings, where the company beat analyst estimates on both the top and bottom lines for the fifth consecutive quarter.
The company's revenue increased by 15% year-over-year to $80.539 billion, surpassing the consensus estimate of $78.594 billion, according to data from Benzinga Pro.
Why It Matters: Earlier this month, reports surfaced that Google was considering charging users for AI-powered search, a move that could potentially generate additional revenue for the company.
As per the report by Financial Times, this development would mark the first time Google enclosed any segment of its fundamental Search product within a paywall. However, the tech giant's traditional search engine will probably remain free of charge regardless.
Price Action: At the time of writing, Alphabet's Class A shares soared 11.6% in the after-hours session at $174.24, while the company's Class C shares shot up 11.4% at $176. The Class A and Class C shares closed nearly 2% lower at $156 and $157.95 respectively in the regular session, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.