Google Rides Global Ad Recovery to Record Revenue
February 02 2021 - 5:02PM
Dow Jones News
By Georgia Wells
Google rode a surge in online holiday spending to record revenue
in the fourth quarter, even though it disclosed for the first time
continued losses in its closely watched cloud division.
The internet titan's earnings, released Tuesday afternoon,
reflected a continuing recovery in global ad spending that took a
hit in early 2020 when people paused travel plans and other
purchases in response to the coronavirus pandemic.
Google parent Alphabet Inc. posted a record $56.9 billion
revenue, up from $43.2 billion a year ago. The company's
advertising units pulled in $46.2 billion, up nearly 22% from a
year earlier. Analysts had forecast $52.7 billion in revenue,
including $42.3 billion from advertising, according to FactSet.
Alphabet's profit also rose, to $15.7 billion, from $9.3 billion
a year ago. Analysts had expected $11.9 billion.
Google also revealed details about the costs of its cloud
division for the first time. While that unit brought in $3.8
billion in revenue, overall it lost $1.2 billion in the fourth
quarter. This announcement will enable investors to better compare
the results of Google's cloud business with those of Amazon.com
Inc. and Microsoft Corp.
Meanwhile on Tuesday, Amazon named its cloud computer guru chief
executive officer of its entire business.
Analysts had expected Google's cloud business to bring in $3.83
billion in revenue, according to FactSet, compared with $2.61
billion a year ago.
Google has managed to sign up big-name clients for its cloud
business. On Monday, Ford Motor Co. said it had decided to use
Google for cloud services to help develop in-car features and
manage the reams of data streaming from its vehicles.
Shares of Alphabet have gained about 17% over the past three
months, compared with a roughly 22% gain in the Nasdaq Composite
Index.
Still, Google is facing growing challenges. A set of antitrust
lawsuits allege various abuses of its power over online commerce
and digital information. They say Google muscles out competitors
and sells out the users it claims to protect.
A small number of employees of Google have also formed a union.
They have said their efforts reflect a need for employees to be
able to speak out about the company without facing career
repercussions.
On Monday, the Labor Department said Google had agreed to pay
more than $3.8 million to resolve a case of hiring and pay
discrimination at several locations in California and Washington
state.
Write to Georgia Wells at Georgia.Wells@wsj.com
(END) Dow Jones Newswires
February 02, 2021 16:47 ET (21:47 GMT)
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