On Tuesday, Google’s parent company Alphabet Inc. reported its quarterly revenue and profit. According to the company, its revenue and profit witnessed an impressive growth that was mainly a result of an increase in advertising spending on the part of consumers. The company’s results beat the expectations of analysts.
Shares of the globally recognized company went up by 3.3 percent in extended trading after the results it announced. Facebook, a rival in web ads sales, saw its shares jump by 1.3 percent. Facebook’s results are going to be reported shortly after Alphabet’s on Wednesday.
Tuesday marked quite an impressive day for big U.S. technology companies. Apple reported impressive results fueled by the sales of its 5G iPhones in the quarter.
The coronavirus pandemic brought a new trend of people spending most of their time online, and retailers have been on their toes doing everything possible to increase their reach online. So be it when they’re searching for items using Google search or just watching YouTube videos, retailers wanted to make sure that their ads had increased reach.
According to Chief Digital Officer at WPP Mindshare, “Alphabet has benefited from the general return of ad spend to the market and especially the balance of that return, which is more focused on digital channels than pre-pandemic.”
Revenue from Google advertising went up nearly 70% to $50.44 billion during the second quarter ended June 30, and according to Philip Schindler – Google’s Chief Business Officer, retail brands contributed the most to the company’s ads business growth. He also told analysts that the travel, financial services, and media and entertainment sectors also did impressively well.
YouTube’s ad revenue jumped 83.7 percent from the same period in the previous year to $7 billion, which is almost as much as Netflix generated in quarterly revenue. Nicole Perrin, an e-marketer principal analyst at Insider intelligence noted that results “outperformed our expectations across all three lines of Google’s ad business: search, Google Network, and YouTube. YouTube was the fastest-growing segment during the quarter and points to the continued strength of video advertising for both direct response and brand goals.”
Alphabet’s total revenue surged 61.6 percent to $61.88 billion and surpassed the $56.16 million that analysts at Wall Street expected, according to IBES data from Refinitiv. The company saw a quarterly profit of $18.5 billion, the same as $27.26 per share, beating estimates of $19.34 per share. Google Cloud had an operating loss of $591 million during the quarter.
Alphabet’s impressive results come on the heels of it facing antitrust lawsuits from federal and state regulators in the U.S. threatening to bring a wave of major changes into its operations – these antitrust lawsuits are targeted at the company’s advertising and smart-home gadgets businesses.
Recently, the company was accused of “unlawfully” maintaining a monopoly for its app store on Android phones and this is expected to take a long time to resolve.