getty Key Findings With Susan Wojcicki stepping down as YouTube CEO and appointing Neal Mohan, YouTube’s current Chief Product Officer, to succeed him this year, Alphabet is going through a period of significant change
In an article on the official YouTube blog, Susan Wojcicki announced that she was stepping down as CEO. Wojcicki has been CEO for the past nine years and worked at parent company Google for 25 years. Neal Mohan, YouTube’s chief product officer, will replace her.
We’ll talk about the changes at YouTube during Wojcicki’s tenure as CEO and look at the company’s recent financial performance and what shareholders should know going forward. If you are interested in investing in technology companies like Alphabet, you should download Q.ai.
Susan Wojcicki resigns
On February 16, Susan Wojcicki announced that she was stepping down as YouTube CEO. This ended Wojcicki’s 25 years at Google, YouTube’s parent company. During that time, she co-founded Google image search, ran Google’s first video and book search, and helped develop AdSense.
Wojcicki also wrote to employees that working at the company felt “exhilarating, meaningful and all-consuming.” Although Wojcicki plans to keep an advisory role at Google and Alphabet, she said she will be stepping down to focus on her personal life, health and other projects.
Wojcicki was Big Tech’s only female CEO, making her departure bittersweet for many. She left a mixed legacy among YouTube content creators, many of whom were frustrated with her support for removing YouTube “dislike” buttons. Other creators have objected to YouTube’s auto-tagging and demonetization policies under her leadership, including many LGBT YouTubers who have accused YouTube’s machine learning technology of bias.
At the same time, Wojcicki took significant steps to combat disinformation on YouTube and helped grow the platform extensively. Since Wojcicki took over the helm at YouTube, the number of daily users has roughly doubled, and new offerings such as a music streaming service and YouTube TV have expanded the range of content.
Neal Mohan prepares to take over
Neal Mohan, YouTube’s chief product officer since 2015, will take over as CEO. Wojcicki said in her message to employees that she worked with Mohan for 15 years, “first when he joined Google in 2007 with the DoubleClick acquisition and as his role grew to SVP of display and video ads.”
Since he joined the YouTube team, many have credited Mohan with helping launch exciting products like YouTube Premium and Shorts. Wojcicki also credits Mohan with leading YouTube’s trust and security team “which ensures YouTube lives up to its responsibilities as a global platform.”
Mohan is a strong choice for a successor, especially considering he made YouTube Shorts competitive with recent challenger TikTok. Wojcicki plans to support Mohan during the transition.
Alphabet (GOOGL) Finance
Alphabet announced its fourth-quarter results earlier this month and reported a miss on both revenue and earnings. Revenue came in at about $76 billion, up just 1% year over year from 32% in the fourth quarter of 2021. YouTube’s revenue also missed analysts’ expectations, coming in at $7.96 billion compared to $8.63 billion last year.
Google announced about 12,000 job cuts in January this year and expects employee severance-related costs to range from $1.9 billion to $2.3 billion. The company will recognize most of this spending in the first quarter of 2023.
Analysts expect headwinds for Google as it announced plans to optimize its global office space. It’s likely that Google will invest heavily in artificial intelligence (AI) this year to stay competitive with the release of ChatGPT and Microsoft’s integration of the chatbot with Bing.
Alphabet decided to start monetizing YouTube Shorts this month to share revenue for the product, which saw its average daily views grow from 30 billion to 50 billion in 2022. Alphabet CEO Sundar Pichai mentioned YouTube’s NFL Sunday Ticket as another offering that will hopefully bring more people to the platform.
The case of Gonzalez and SCOTUS
Gonzalez v. Google LLC is a court case that will appear in the Supreme Court this term and could have ramifications for Alphabet and the internet. The case addresses computer services that make targeted recommendations, such as YouTube, and situations where those recommendations unintentionally promote terrorist content hosted on the service.
If a recommendation system can be held liable for advertising dangerous content and Google is not immunized under Section 230(c)(1) of the Communications Decency Act, it could significantly change the operation of a service like YouTube.
The arguments for this case are scheduled to begin on February 21, 2023. We will continue to follow this case and its findings.
What does this mean for investors?
YouTube’s leadership changes have got Alphabet shareholders wondering if the platform can begin to make a significant contribution to the company’s revenue. Additionally, the pending court ruling has investors questioning what the future holds for advertisers in the emerging tech sector if the Supreme Court doesn’t rule in Google’s favour.
Mohan’s experience promoting Google and his background in launching new products for YouTube could bode well for investors hoping YouTube will contribute more to Alphabet’s profits. However, YouTube is just one facet of Alphabet’s finances, and its overall impact is small compared to Google search and advertising.
The bigger problem in the game seems to be the pending court case. If Google loses the case and Section 230 is fully revised, advertising profits could fall as content needs to be filtered to avoid promoting dangerous messages.
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The final result
YouTube CEO Susan Wojcicki is stepping down after nine years at the video-sharing platform and 25 years at parent company Google. Neal Mohan will replace Wojcicki in hopes of helping revitalize Alphabet’s revenue by boosting YouTube’s revenue.
Alphabet faces many challenges as technology advances and lawsuits unfold. Time will tell if the company can get back on track.
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