Published: Wed, February 03, 2021
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Search and YouTube continue to drive growth for Google

Search and YouTube continue to drive growth for Google

Revenue from Google, the largest business division, increased 22%, with the cloud business growing 47%. For the year, Google reported a total of US$182.5 billion, up from $161.9 billion the previous year. Analysts forecast a profit of $15.93 a share and revenue of $53.1 billion. Overall, Alphabet's revenue grew 23% year-on-year.

"Our strong results this quarter reflect the helpfulness of our products and services to people and businesses, as well as the accelerating transition to online services and the cloud", says Google and Alphabet CEO Sundar Pichai.

Fourth-quarter revenue, excluding payments to distribution partners, came in at US$46.43 billion, the Mountain View, California-based company said in a statement. Alphabet shares jumped more than 7% in extended trading after a 1.4% rise during the trading day, to $1,919.12 a share.

Google's lead over the global internet advertising market is shrinking as Inc becomes a bigger threat and China-focused vendors such as Alibaba grow quickly.

Analysts also have expressed concern about potential revisions to content moderation and data privacy laws under new U.S. President Joe Biden. Google Services contributed $52.9 billion in net income in the quarter, Google Cloud added $3.8 billion, and Alphabet's other bets added $196 billion. That was a gain of 31.7% from the $43.2 billion that Alphabet grossed during last year's fourth quarter.

Cloud sales, also benefiting from the pandemic, were $3.83 billion, or $13.1 billion for the full year, up 46% from 2019.

Those increases came after Google's ad revenue fell 8 percent during last year's April-June period that unfolded after most of the USA economy had shut down.

"We will continue to make disciplined investments" in cloud, he said.

Chief financial officer Ruth Porat said the growth was driven by Search and YouTube. Wall Street is modeling adjusted earnings to jump 80%, to $9.03 a share, on a revenue increase of 27%.

Advertising on YouTube during the past quarter rose 46% from the previous year to $6.9 billion. That is more in line with the industry's annual growth during the past decade, except a year ago when digital ad spending rose by just 8 percent because of the recession triggered by the pandemic. "The bottom line may see some pressure due to rising costs and softening growth rates in AWS, but recent acceleration in Amazon's high-margin ads business could easily counteract those concerns".

Things are expected to get even better for Google from here, assuming the COVID-19 vaccine eases the pandemic and enables the economy to reopen as the year progresses.

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