May 11, 2021

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Google emerges stronger from the coronavirus crisis

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Posted on Apr 28, 2021 9:19 AMUpdated Apr 28, 2021, 3:37 PM

With the recovery of the US economy, advertising revenues of Google fly away. The online search giant made $ 55.31 billion in revenue from January to March, 34% more than a year ago when its revenues were affected by the pandemic. It also continues to invest in online business services, but remains far behind its rival Amazon.

Unlike other tech companies, the California giant hadn’t really taken advantage of the coronavirus pandemic. Its turnover even crumbled last spring, when the company had to deal with a decline in research of all kinds (restaurants, hotels, plane tickets, etc.) and a drop in its income. advertising. The situation had started to improve in the summer, thanks to a gradual reopening of businesses and lower costs.

A year later, Google seems to come out of the crisis stronger. Its net profit reached $ 17.93 billion, almost triple from last year. All of its activities (Google Search, YouTube, Google Cloud, etc.) are growing. A “titanic” quarter, according to independent analyst Patrick Moorhead, quoted by AFP.

These good results were hailed by the financial markets: the action Alphabet climbed more than 4% after the close of Wall Street. The group bought back $ 50 billion in shares.

YouTube exceeds expectations

The bulk of the group’s revenue – nearly 60% – still comes from search engine advertising. Thanks to the reopening of the economy, they jumped 30% in one year, from 24.5 to 31.9 billion dollars. But Alphabet is looking to invest in new niches, by investing in Youtube and in business services.

YouTube advertising revenue has increased by half in a year to $ 6 billion, a figure higher than analysts’ forecasts. “I think we’re just starting to explore the business potential of YouTube,” said Philipp Schindler, Google’s vice president of sales.

To continue growing in video, Alphabet is rolling out YouTube Shorts in the United States. This new application seeks to duplicate the success of TikTok, acclaimed by young Americans.

Cloud lagging behind

On the other hand, its online computing activity for professionals (“cloud computing”) is still struggling to catch up with the two giants of the sector, Amazon and Microsoft. At the end of 2020, Google only controlled 7% of the market, far behind its two rivals who control 32 and 20% respectively, according to the Canalys firm.

But this division, which continues to lose money, nevertheless still shows very strong growth of 42.9% over one year and reached 4 billion, in accordance with forecasts. It benefited in particular from the rise of remote working during the pandemic. Alphabet’s CFO, Ruth Porat, said she was “very happy with the current momentum of Google Cloud.”

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