Alphabet’s profits were fueled by online advertising from Google
Pandemic lifestyle changes that have put the internet at the center of seemingly everything turned out to be a financial boon for Amazon and Google in the last three months of last year.
The parent Google alphabet and Seattle-based e-commerce colossus reported heavy revenues Tuesday due to thriving internet advertising and the booming online shopping market.
“We pride ourselves on the fact that people continue to choose Google’s products to keep up to date and comfort themselves in uncertain times,” said managing director Sundar Pichai in a call for earnings with analysts.
According to Alphabet, quarterly earnings rose roughly 50 percent to $ 15.2 billion late last year as the digital ad business flourished.
Alphabet sales for the last three months of last year were nearly $ 57 billion, compared to $ 46 billion for the same period in 2019, according to internet titan.
The strong quarter “was driven by Search and YouTube as consumer and business activity recovered from the beginning of the year,” said Ruth Porat, Alphabet’s chief financial officer, in the earnings release.
Companies that restricted digital advertising early last year due to the pandemic came back into effect in the final quarter after customers flocked to the internet instead of taking the risk of risking Covid-19 in stores, according to Philipp Schindler, chief Business Officer from Alphabet.
“All three of Google’s main businesses, including YouTube, exceeded our forecast,” said Nicole Perrin, eMarketer insider intelligence analyst.
According to Perrin, ad revenue related to online searches on Google increased more than 17 percent.
Overall, Google had sales of just over $ 46 billion from digital ads. Of this, $ 6.9 billion came from a growing advertising business on the global video sharing platform YouTube.
Google’s cloud computing unit grossed $ 3.8 billion for the quarter, compared to revenue of $ 2.6 billion for the same period last year.
The pandemic is believed to have accelerated a permanent shift of businesses, businesses and people in general to the use of services in the internet cloud.
“We see significant opportunities to form meaningful partnerships as companies increasingly look to a digital future,” said Pichai.
Google’s dominance in online advertising, while a financial blessing, has put it in the crosshairs of regulators concerned about the company’s clout. It is the target of a trio of antitrust lawsuits in the US accusing it of abusing its position.
Regulators are concerned that the Silicon Valley giant’s search engine, ad platform, map service, Android mobile operating system, and other offerings are giving it unfair advantages.
Amazon saw sales jump to $ 125.6 billion in the final quarter of last year, up 44 percent from $ 87.4 billion for the same period in 2019, according to the earnings report.
Income for the quarter more than doubled to $ 7.2 billion in a similar comparison.
“Our data shows that Amazon was being used more than ever for Christmas gifts, especially for those with health concerns about personal purchases,” said Neil Saunders, managing director of GlobalData, in a statement to investors.
“Looking ahead, we stand by our belief that Amazon will emerge from the pandemic as a bigger and stronger company.”
The blockbuster earnings report included the announcement that founder Jeff Bezos would step down as chief executive later this year and hand over control of the company to Andy Jassy, head of Amazon Web Services’ lucrative cloud computing division
“When you look at our financial results, you are actually seeing the long-term cumulative results of the invention,” Bezos said in the earnings announcement.
“Right now, I see Amazon in its most inventive form, which makes it an optimal time for this transition.”
Google parent alphabet profits will drop as the virus hits the ad market
© 2021 AFP
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