Tech Transformers

How Alphabet investors should think about voice search making money at Google, according to its CEO

Why consumers and investors should expect a lot more from Google
Why consumers and investors should expect a lot more from Google

Google, Amazon and Apple have touted the potential of voice assistants recently, but investors are still scratching their heads over how they will make money from the technology.

Sundar Pichai, CEO of Google, offered a glimpse into the search giant's thinking during an earnings call on Thursday. In response to a question on how voice search can be monetized, he suggested that Google Assistant – its own voice feature – needs to be thought about as a part of a user's overall search journey. This will lock people into Google's ecosystem of services.

"I would encourage you to think about it as, from a user's standpoint, they are looking for information, looking to get things done. The voice queries are one part of the total journey they are on. So when we think about something like the Google Assistant we think about it as an ongoing conversation with our users across different contexts," Pichai said.

"So they may ask a question on voice, later when they pick up their phone they want continuity, so we think of this as an end-to-end thing. And all of this means users engage more with us, more with computing, and look for more information and I think the trends we see are positive. So we think about it from a long term perspective, so I see more opportunity than challenge when I think about voice search."

Voice ‘natural’ way to interact

Google Assistant was unveiled towards the end of last year and is currently integrated into the company's Pixel smartphones, as well as the Google Home device – a smart connected speaker similar to Amazon's Echo.

No official sales figures about Google Home have been released but Pichai said it had a "strong quarter" and the search giant is planning "to invest a lot" in the device this year. The CEO admitted that it is "very early days" for voice search but offered a vision for how it would manifest across different platforms.

Google Home
Source: Google

"I think it's a very natural way for users to interact. We think it will be one mode. Users will have many different ways by which they interact with computing. And for voice … We expect voice to work across many different contexts so we are thinking about it across phones, homes, TVs, cars, and trying to drive that ecosystem that way and we want Google to be there for users when they need it," Pichai said.

‘Lot of work ahead’

Google's strategy is very similar to what Amazon is looking to achieve with Alexa, its own voice assistant. At the Consumer Electronics Show (CES) earlier this month, Alexa stole the show as Amazon announced integrations with a number of companies and devices from Ford cars to LG's new refrigerators. The tactic for Amazon is to almost become the operating system for the so-called Internet of Things (IOT) – the plethora of devices being connected to the internet.

Even though Amazon doesn't make the devices, the fact that they are powered by Alexa allows the e-commerce giant to interact with customers and offer services. Google's advantage is that nearly 9 in every 10 smartphones run its Android operating system (OS), according to research firm Strategy Analytics, so it has a large user base to push Assistant to.

Think of big picture when it comes to Alphabet: Expert
Think of big picture when it comes to Alphabet: Expert

Still, Pichai admits that there is still work to do when it comes to voice search, but he is bullish on the future.

"I think there's a lot of work ahead to make all of this work well for users. This is the core area where we have invested in for the very long term and so I feel very comfortable about how this will play out in the future," Pichai said.