The news: Google reduced its sub-$500 million smart TV budget by 10%, laid off a quarter of its 300-person TV staff, and scaled back investments in connected TV (CTV) initiatives like Google TV and Android TV, per The Information.
The latest changes prioritize YouTube and cloud, which now drive Alphabet’s $110 billion annual run rate. With over $50 billion in annual revenues, YouTube is outpacing growth across Alphabet.
Realigning around YouTube: Internally, YouTube is being treated like a separate empire, with new leadership searches underway to scale its paid services and infrastructure. The company could be spread thinly across its various platforms and is now focusing on YouTube’s expansion.
Why streaming as the CTV breadwinner?
- YouTube’s ad and subscription units surpassed $50 billion in revenues for the 12-month period ending in September 2024, marking the first time it’s reached this milestone.