Google smashes through forecasts as YouTube booms during lockdowns

Alphabet Inc (NASDAQ:GOOG), the owner of search engine Google, posted record numbers for the final quarter of 2020 after a surge in ad spending.

Revenues in the three months to end-September jumped by 23% over a year ago to US$56.9bn, while for the year overall there was a 13% rise to US$182.6bn.

It was the second quarter running that the Google-owner had posted record revenues.

Advertising sales, which includes  YouTube, contributed 81% of the fourth-quarter revenue.

For the first time, Alphabet also split out Google Cloud’s contribution, which chipped in revenues of US$13bn for the year and US$3.8bn for the quarter.

Group earnings in the final three months of the year soared 68% to US$15.6bn, while for 2020 in total Alphabet posted net income of US$41.2bn, a 20% increase even with heavy losses at Google Cloud of US$5.6bn and losses at what is described as other bets of US$4.48bn.

Ruth Porat, CFO of Google and Alphabet, said in the statement: “Our strong fourth-quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year.

Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum.”

Philipp Schindler, Google’s chief business officer, reiterated in a conference call that Youtube was a key driver behind the better-than-expected performance.  

 “Our brand business was hit hard in the early stages of the pandemic, but rebounded in Q3 and into Q4. It really helps advertisers reach a younger audience.”

“We now reach more 18-to 49-year-olds than all linear TV networks combined,” he added.

Google is facing a number of headwinds in the current year, including the possibility of multiple anti-monopoly writs aimed at the dominance of its search engine business.

Story by ProactiveInvestors