Google’s parent company Alphabet on Thursday reported its financial performance for the fourth quarter of 2016, and the news wasn’t good. Alphabet missed Wall Street’s target, and the stock took a hit in after-hours trading. Google’s search business is still the main money-maker for Alphabet, dwarfing all other initiatives, including hardware. Analysts are now concerned for Google’s future, as they found a potential problem for the search giant: voice.
One of the winners of CES earlier this month was Amazon, and there’s no doubt about it. The company’s voice-based Alexa assistant will not be exclusive to Amazon hardware. Instead, Alexa will be found inside or work with a variety of products this year, including refrigerators, cars, accessories for home (other speakers, smart lamps, robots, etc.catchup), and even smartphones.
Amazon’s Echo smart speaker is a massive win, one that made Amazon the de facto leader in voice-based interaction. Apple, Google, and Microsoft all have their own voice assistant, but the companies focused on mobile devices (smartphones and laptops), while Amazon took over the home. And Google is now catch up with its Google Assistant that powers just Google Home and the Google Pixel, for now.
Wall Street analysts have been pressing Google CEO Sundar Pichai on Thursday on the matter. According to Business Insider, analysts asked Google whether the company is at risk from the growing popularity of voice-based devices.
The problem with these devices is that they lack any sort of screen that could display ads, which presents a huge problem for Google. Advertising is the main business model for Google, and if can’t show ads it can’t make money.
Pichai said that Google was “comfortable” about the future, but he didn’t explain how Google will adapt its search business model to computing experiences that don’t require screens.
“We think about it from a long-term perspective,” Pichai said. “So I see more opportunity than challenge when I think about voice search.”
Pichai said that ”users will have many different ways by which they interact” with computers, with voice being just one mode.
Pichai told the audience that it’s “early days” for voice computing and that Google has more experience than competitors working on natural language search and speech recognition.
That said, Google isn’t doomed, and it’ll surely fight fiercely in the voice-based computing age that’s about to start. But right now it’s Amazon who’s getting all the attention.