Google’s parent Alphabet is growing at a slower pace
At the beginning of the Corona crisis, Google’s advertising business initially collapsed – and then jumped up again. These fluctuations now make it difficult to compare quarterly figures.
At Google’s parent company Alphabet, the recent rapid growth is slowing down. Sales increased 23 percent year-on-year to $68 billion, Alphabet said on Tuesday.
Analysts had expected a little more. The group referred, among other things, to the consequences of the Russian war in the Ukraine – economic worries had partially slowed down spending on online advertising in Europe.
At the same time, Alphabet also sees a statistical effect behind the lower growth figures: At the beginning of the corona pandemic, business collapsed – and then quickly recovered. A year ago, the comparison to the weak first quarter made the leap in sales look higher, the plus was 34 percent. Now the increases are naturally lower. CFO Ruth Porat warned that the effect would be even more pronounced in the current quarter. The stock fell a good three percent in after-hours trading.
The bottom line was that profits fell from $17.9 billion in the same quarter last year to a good $16.4 billion (15.4 billion euros). Among other things, Google is investing massively in the competition with Amazon and Microsoft for the cloud services business.
Advertising at Google remains the mainstay of the Alphabet Group. The advertising business grew 22.3 percent year-on-year to $54.66 billion.
At the same time, advertising revenues on YouTube climbed by a good 14 percent to just under $6.9 billion. The video platform is in competition with the Tiktok app, among others, whose popularity has recently felt the effects of Facebook, for example. Google, on the other hand, points out that more than two billion users access YouTube every month and that the competing format shorts is widely used.
In the cloud business, sales grew by almost 44 percent to $5.8 billion. The operating loss went back from 974 to 931 million dollars.
In the so-called “other bets,” which include Waymo’s self-driving car development and Verily’s health research, sales jumped from $198 million to $440 million year-on-year. The operating loss of the range remained thereby with approximately 1.15 billion dollar nearly stable.