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Google's CEO didn't have an answer for a potentially huge weakness in its business

Jan 27, 2017, 05:18 IST

AP

If Google has one weak spot right now, it's voice-based computing.

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And on Thursday's Q4 earnings call, Wall Street analysts cut right to the chase, asking Google executives if the company was at risk from the growing popularity of voice-enabled devices, which lack the screens Google's online ads rely on.

Google CEO Sundar Pichai sought to tamp down the concerns, telling analysts on the call that Google was "comfortable" about the way things would play out over the coming years.

But Pichai didn't provide any details about how Google planned to evolve its ad business into the world of voice-based computing.

Instead, he tried to assure his audience that the threat isn't as big as some might expect. Sure voice-enabled gadgets like the Amazon Echo, and Google's own Home device, don't have screens - screens that currently display the online ads that account for the vast majority of Google's revenue.

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But who really thinks screens aren't going away?

Voice will only be "one mode," he said. "Users will have many different ways by which they interact" with computers.

It's still "early days" for voice based computing, Pichai added. And he stressed that Google's years of experience working on natural language search and speech recognition give it a big edge over the competition.

Hollis Johnson/Business Insider

Still, the fact is that Google is at an inherent disadvantage when it comes to voice computing.

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The big player in voice computing right now is Amazon, which sells the Amazon Echo speaker as well as a slew of new and upcoming products with the Alexa voice assistant built in. Amazon doesn't need to make money from search ads. Instead, it can use Alexa as a way to encourage users to buy more stuff from Amazon and sign up for services like Amazon Prime.

Google can keep selling Home devices - its own version of the Echo - but those hardware sales won't make up for the bigger loss of ad revenue if voice really catches on and the world moves away from screens.

Google needs to figure out a new type of ad or a new business model.

But if Google has a plan, it's keeping it close the vest and hoping that investors won't worry too much.

"We think about it from a long-term perspective," Pichai said. "So I see more opportunity than challenge when I think about voice search."

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