Google ads gain fuels profit for parent company Alphabet

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Shares fell less than 1% to $2,763 in after-hours trading

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A steady jump in digital ad spend at Google drove its parent company’s profit up 68% in the third quarter.

California-based Alphabet Inc. Mountain View said Tuesday that it earned $18.94 billion, or $27.99 per share, in the July-September period. Revenue rose 41% to $65.12 billion.

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Analysts polled by FactSet expected earnings of $23.73 per share on revenue of $63.53 billion. Shares fell less than 1% to $2,763 in after-hours trading.

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Google is the world’s leading search engine, owns the largest mobile operating system in Android and runs the giant video site YouTube. According to eMarketer, it accounts for 29% of the global $455 billion digital advertising market, closely followed by Facebook. Both tech giants are benefiting as companies that invested more money in marketing last year during the pandemic.

Apple avoids revenue hit by privacy changes

The company’s dominance has drawn scrutiny over the years, and regulators in the US and other countries have gone after Google on various aspects of its business, including search, ads and its App Store, to try to curtail its reach.

Google’s chief business officer, Philip Schindler, said the advertising business, the company’s core, grew 43% to $53.13 billion, with retail “by far” being the biggest contributor to that growth. The company sees a lot of potential in retail, including YouTube ads, which let users buy directly from creators’ videos. YouTube’s ad revenue rose 43% to $7.21 billion in the most recent quarter.

Synovus analyst Dan Morgan said it appears Apple’s recent iOS 14 privacy changes, which make it more difficult for companies to track users and target ads, were affecting the results. Snapchat And they were more on Google than on Facebook. When asked about the impact on Tuesday, Google CFO Ruth Porat said only that Apple’s changes had a minor impact on YouTube’s revenue.

Google is also trying to get a bigger share of the cloud-computing business, where it competes with Microsoft and Amazon. The division climbed 45% to $4.99 billion with operating losses of $644 million.


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