Internet searches
Google’s advertising business continues to grow rapidly
The Google parent company Alphabet has significantly exceeded market expectations with its figures for the past quarter. (Archive image) Photo: Michel Euler/AP/dpa
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Google is coming through the pandemic brilliantly thanks to bubbling advertising revenue. But the quarterly figures also show that advertising in the Internet search environment remains the mainstay of the business.
Google continues to benefit massively from the boom in online advertising in the corona pandemic. The parent company of the Internet giant, Alphabet, booked a jump in sales of 32 percent and a profit of 20.6 billion dollars (18.3 billion euros) in the last quarter.
The main pillar of the business remains the ads in the context of Internet search queries.
The pandemic has seen more ad spend go online, and at the same time, people are doing more things online. Google benefits from both trends. Ad revenue for the Google search engine rose almost 36 percent year-on-year to $43.3 billion. At $8.6 billion, the YouTube video platform brought in around a quarter more advertising revenue than a year earlier.
Ad revenue increases
Overall, Google’s ad revenue increased from $46.2 billion to $61.2 billion within a year. With an operating result of around 26 billion dollars, Google services were also the only profit maker.
Cloud offerings, meanwhile, grew from $3.8 billion to $5.5 billion in revenue while operating in the red at $890 million. Google is attempting to catch up with rivals Amazon and Microsoft in the online software and storage business.
The group’s so-called “other bets” such as self-driving cars and delivery drones made less sales, but at the same time more losses. Revenue fell from $196 to $181 million. The operating minus rose from 1.1 to 1.4 billion dollars.
Alphabet exceeds expectations
Overall, Alphabet’s quarterly results significantly exceeded market expectations. Group sales reached $75.3 billion, while analysts had expected a good $72 billion. The bottom line is that quarterly profit rose from 15.2 to 20.6 billion dollars, as Alphabet announced after the US market closed on Tuesday.
The stock jumped a good 10 percent in premarket trading on Wednesday. Alphabet also announced a 1-for-20 stock split. This will make the stock more affordable for retail investors and easier to trade after last trading above $2700.
Google – like Facebook and Apple – has recently been targeted by US competition authorities who want to increasingly curb the market power of tech giants. In a conference call with analysts, Google and Alphabet boss Sunder Pichai appealed to US lawmakers to consider “unintended consequences” of proposed legislation that would degrade users’ services and weaken US platforms.