Google revenue soars 14% to $46 billion
Facing a global pandemic, the biggest tech antitrust lawsuit in more than two decades and an escalating battle against accusations of censorship, Google has somehow defied the odds to turn in a good performance in the 3rd quarter.
Against the odds, the tech titan’s parent company, Alphabet, reported revenue of $46.17 billion for the three months ending in September — a 14% increase from the same period last year — highlighting its continued dominance despite facing a myriad of obstacles.
The company also reported net income for the third quarter of $11.2 billion, blowing past analyst estimates. Alphabet stock rose more than 8% in after-hours trading on Thursday.
“We had a strong quarter, consistent with the broader online environment,” Sundar Pichai, CEO of Alphabet and Google, expressed in a statement. “It’s also a testament to the deep investments we’ve made in AI and other technologies.”
Thursday’s earnings report marks a strong turnaround from the previous quarter, when Alphabet posted its first revenue decline in history as online ad spending pulled back in the early days of the pandemic.
In the third quarter, however, Google’s advertising revenue jumped nearly 10% year-on-year, with search advertising revenue growing 6.5% and YouTube ad revenue surging 32%.
The blockbuster earnings “reflect broad based growth led by an increase in advertiser spend in Search and YouTube as well as continued strength in Google Cloud and Play,” Alphabet CFO Ruth Porat said in a statement. “We remain focused on making the right investments to support long term sustainable value.”
The earnings came a day after Pichai faced hours of questioning from lawmakers — along with the CEOs of Facebook and Twitter — over their content moderation policies and accusations of political bias.
Pichai defended his company’s handling of content, saying it approaches its work without political bias, “full stop.”
“To do otherwise would be contrary to both our business interests and our mission, which compels us to make information accessible to every type of person, no matter where they live or what they believe,” he added.
Google was also hit with an antitrust lawsuit by the US Department of Justice last week, the largest such case against a tech company in more than two decades when Microsoft was sued. The Justice Department alleged that Google has stifled competition to maintain its powerful position in the marketplace for online search and search advertising. Google has refuted those accusations, citing the lawsuit as “deeply flawed.”
“People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives,” Google’s Senior Vice President for Global Affairs, Kent Walker, wrote in a blog post.
Pichai echoed that sentiment during Thursday’s earnings call. “We know our success in search is not guaranteed,” he said. “We are proud that people choose Google search, not because they have to, but because it’s helpful.”
The Justice Department, meanwhile, has said “nothing is off the table” when it comes to regulating the company’s search dominance. Although he sought to somewhat downplay that dominance during the earnings call, Pichai also repeatedly touted the indispensability of Google search, particularly during the pandemic.
“Access to information has never been more important,” he said on the company’s earnings call. “This year, including this quarter, showed how valuable Google’s founding product, search, has been to people.”
The pandemic has also provided a boost to Google’s other services, as people continue to work and socialise from home.
Revenue’s for Google’s cloud business increased 45% compared to the same quarter last year.