Advertising continues to drive revenue for Alphabet, Google’s parent company

Google’s parent company, Alphabet, has had a very good year in 2021 and a fourth quarter that exceeded analysts’ expectations. The results published on February 1 by the company (pdf) confirm the importance of its advertising revenues, around 80% of its turnover, drawn mainly from its search engine and YouTube.

Google exceeds the threshold of 200 billion!

With 257.6 billion dollars in turnover, up 41% and 76 billion dollars in profits, up 90%, the American giant has been able to withstand a turbulent 2021: the shortage of components, the inflation, the pandemic that refuses to be forgotten and the onslaught of regulators and legislators on both sides of the Atlantic.

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Since 2016, the company has tripled its turnover and confirms its resistance to the various challenges posed on its way. In the fourth quarter of 2021 its turnover reached 75.3 billion dollars, 32% more compared to the same period in 2020 and profits of 20.64 billion dollars, an increase of 5 *small* billion still vis -towards 2020.

Sundar Pichai, CEO of Google notes in the fourth quarter ” continued strong growth in our advertising business “. Philipp Schindler, head of commercial activities for the American giant, explains: Our performance was helped by strong advertiser spending and strong consumer online activity “.

The advertising addiction of the web giant

Revenue from Google’s advertising business, 80% of the total, reached $61.2 billion in the fourth quarter. A result carried by the search engine activity and YouTube, respectively 43.3 and 8.6 billion dollars. Google has been more resistant than Facebook, Snapchat or YouTube, faced with the arrival of App Tracking Transparency (ATT) on iOS, the new privacy protection system.

After advertising, the other segment of Google with notable performance is the category, slightly catchall as its name suggests, “Google Other”. The 8.16 billion dollars in turnover intersects with the income of Android, the Play Store, the income of in-house hardware such as the range of smartphones, Pixel.

Sundar Pichai insisted on this last point by welcoming “ a quarterly sales record for our Pixel phones despite supply constraints “. The CEO did not detail this ” record “.

The next challenge for the company is in the clouds: Google Cloud is still far from Microsoft Azure and especially from Amazon Web Services. The activity recorded a turnover of 5.54 billion dollars, up 45%. A shadow in the picture, however, this sector remains in loss of 890 million dollars in the fourth quarter of 2021. If the management insists on the 1.2 billion losses in the same period in 2020, in the third quarter of 2021 the losses were less, $644 billion.

Finally, the “Other bets” segment, including Waymo, the autonomous driving subsidiary and Verily, the health subsidiary, reported $180 million for $1.4 billion in losses in the fourth quarter. An investment for the long term according to Google.

Regulation, another vision of hell for Mountain View

On the business side, Google recruited 6,500 people during the quarter, bringing its total workforce to 156,500 employees. A rate of hiring which should continue in 2022 according to Ryth Porat, financial director of Alphabet. The latter also mentions an increase in investments in this new year to build or modernize new offices.

Nothing seems to be able to stop Google and yet. Sundar Pichai said he was concerned during the release of the results, the lawsuits initiated by US attorneys general and the legislative projects of Congress. He dreads ” that they may prevent us from providing some of our current services “. The CEO warns, the measures taken “ disadvantage only American companies and not Chinese companies, according to the usual subtext of tech lobbyists in Washington.

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