Now a part of Alphabet Inc. (NASDAQ: GOOGL), Google began its ascent in the search engine business in the 1990s, and by the turn of the century, it was the dominant company in the sector. Except in Russia and China, its market share rose to 90% across most of the rest of the world. Despite some antitrust challenges, it remains one of the world’s greatest money machines.
Google bought YouTube in 2006 for $1.65 billion in Google stock. Then a site for goofy videos, it has since become by far the dominant streaming platform in America. It is larger than second-place Netflix based on market share. And, it has begun to compete directly, and successfully, with other paid subscription services. It has gone from a novelty to a major division of Alphabet, which was the umbrella company created in 2015 to hold all of Google’s divisions. In the most recent quarter, YouTube had revenue of $10.3 billion, against the company’s total of $102.4 billion. That was nearly as large as Cloud Services, which had revenue of $15.2 billion
Alphabet dominates search, video streaming, email (with Gmail), online maps, and the browser sector with Chrome.
However, doubts about Alphabet include whether it could keep pace with the next generation of technologies. In cloud computing, it ranked third (on a good day) behind Microsoft’s Azure and Amazon’s AWS. It was not a force in artificial intelligence (AI), which many believe is the most important invention in two decades, maybe longer. OpenAI’s ChatGPT outflanked it and the rest of the industry. So had Anthropic, Elon Musk’s xAI’s Grok, and Microsoft’s Copilot.
Alphabet suddenly jumped to the head of the AI pack with the release of Gemini 3. By many measures, it performed better than OpenAI’s GPT-5. Axios reported, “Analysts, users, and industry insiders say Gemini 3’s superior benchmarks, integration into Google’s ecosystem, and cost efficiencies are pressuring OpenAI, especially after GPT-5’s underwhelming August release.”
Gemini 3 was only part of the huge leap Alphabet took forward last week. Its new TPU chips have been compared favorably to Nvidia’s GPU. The product is so good that it appears Meta may adopt it, giving Alphabet a huge win over Nvidia. It appeared that Alphabet had fallen behind the other mega-tech companies in AI, and, like the rest of the industry, it would be hostage to Nvidia’s chip business. Today, neither is the case.
Last week, Alphabet leapfrogged over Microsoft to become the third most valuable company in the world, with a market cap of $3.9 trillion.
Alphabet dominated much of the tech world from 2000 to early in this decade. It has begun to dominate again.
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