Despite announcing for the first time ongoing losses in the closely watched cloud segment, Google recorded an increase in online vacation spending to break a revenue record in the fourth quarter.
Internet titan’s earnings announced on Tuesday afternoon, in response to people’s travel plans and other purchases in early 2020 coronavirus outbreak.
It had a record revenue of $ 56.9 billion from $ 43.2 billion a year ago. The company’s advertising units grossed $ 46.2 billion, an increase of about 22% compared to the previous year. Analysts estimated $ 52.7 billion in revenue, including $ 42.3 billion from advertising, according to FactSet.
Alphabet’s profit also increased from $ 9.3 billion a year ago to $ 15.7 billion. Analysts expected $ 11.9 billion.
Google’s chief financial officer, Ruth Porat, said the company has improved the performance of its search and YouTube units this quarter. “It was a great end to a tough year,” he said.
YouTube revenue grew 46% this quarter as advertisers flocked to the video sharing platform in the midst of the epidemic. The company said the platform now reaches more users between the ages of 25 and 49 than all cable networks combined.
Google also announced details about the costs of the cloud segment for the first time. While this unit generated $ 3.8 billion in revenue, it lost a total of $ 1.2 billion in the fourth quarter. This announcement will enable investors to better compare the results of Google’s cloud business with the following.
Meanwhile, on Tuesday, Amazon named cloud computing guru Andy Jassy as CEO of his entire business, along with its founder.
changing to the role of chief executive.
Analysts expected Google’s cloud business to generate $ 3.83 billion in revenue, compared to $ 2.61 billion a year ago, according to FactSet. Alphabet CEO Sundar Pichai said in 2020 that Google Cloud had signed more than three times the number of deals worth at least $ 250 million as in 2019.
Google has managed to register big names for the cloud business.
Ford Motor Şti.
said that Decided to use Google for cloud services Assisting in developing in-vehicle features and managing data streams from their vehicles.
Alphabet shares rose more than 7% in after-hours trading. The stock gained nearly 17% in the past three months, compared to an increase of about 22% in the Nasdaq Composite Index.
The strong holiday season also added to Alphabet’s mountain of cash, which is currently $ 26.5 billion. Alphabet recorded a cash position of $ 20.1 billion in early October.
Still, Google faces growing challenges. A series antitrust cases It claims various abuses of its power over online commerce and digital information. They say Google stands out from its competitors and sells users it claims to protect.
Consumers also demand greater accountability for how companies use their data. The company said it plans to restrict the use of third-party cookies in the Chrome internet browser. In a meeting with analysts, Philipp Schindler, Google’s chief operating officer, said the company will continue to change its policies. “People demand more privacy,” said Mr. Schindler.
A small number of Google employees also formed a union. They said their efforts reflected a need for employees to be able to talk about the company without facing career consequences.
On Monday, the Ministry of Labor said Google acknowledges: Pay more than $ 3.8 million To resolve recruiting and payment discrimination in various locations in California and Washington state.
Alphabet said it currently has more than 135,000 employees.
Summer Georgia Wells Georgia.Wells@wsj.com
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