Google And Microsoft Roar in Q1 2021
This is the age of digital. This is the age of Google. And the numbers are making the case: YouTube ad revenue grew 50% to $6 billion in Q1 2021, getting closer to the Netflix range. That is a record acceleration.
A pick up in the advertising business pushed Alphabet revenue higher across the board, sending its stock soaring in after-hours trading and marking the tech giant's third straight quarter of record profits. The Google parent's ad business rose on the back of the vaccine-led recovery with YouTube ad revenue growing 50% to $6 billion. Yahoo Finance noted that Alphabet had underperformed its tech peers last year, but shares have risen 30% year-to-date. Alphabet's chief financial officer said "elevated online activity" during the pandemic was a boon to the core business, and they don't expect it to last as restrictions are largely lifted. (LinkedIn)
The is the summary from Fortune newsletter: strong and dominant American tech firms.
At least for the first quarter, the pandemic-induced tech boom is still strong. Microsoft reported that its sales grew 19% to $41.7 billion, better than analysts forecast, led by its Azure cloud unit and sales of Xbox gaming consoles (which could have been even better if not for the global chip shortage). “Over a year into the pandemic, digital adoption curves aren’t slowing down. They’re accelerating,” CEO Satya Nadella said.
At Google, advertising is booming as more people 49 and under watch YouTube videos than old-fashioned TV. Overall sales rose 34% in the quarter to $55.3 billion, led by a 49% increase at YouTube and 46% gain from Google Cloud. Some analysts now think YouTube could match Netflix’s expected annual revenue of $30 billion this year. But CFO Ruth Porat was a little more conservative in her outlook than Nadella. “It’s too early to forecast the extent to which these changes in consumer behavior and advertising spend will endure,” she said on a call with analysts. Noting sales of work-from-home gear probably wouldn’t continue, she added, “We think it’s premature at this point to really assess how durable this consumer behavior trends are.”
