This is simply a great performance: Google’s parent company, Alphabet, made a huge statement for the digital economy, hitting $56.9 billion revenue for its 2020 fourth quarter. Advertising drove it with YouTube and Google Search the blood and spinal cord of the Google central nervous system of generating alpha.
Of course, what is also missing there is that Google devalued many ad clicks for publishers. If you were paid $1 for 1,000 views on Dec 31 2019, by Jan 1 2020, Google required you hit 2,000 views. That power and capacity to change the “ad currency” is the reason why Google could hit these numbers.
I am nearly confident that Google did not serve more adverts on absolute volume. Rather, it cut the hands of its partners, especially publishers because of its superior positioning in the market as the super aggregator.
Yet, it is all free market – and Google should be celebrated for putting itself in this position to win.
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.
Ruth Porat, Google’s financial chief, said the company’s search and YouTube units drove its performance in the quarter. “It was a great end to a challenging year,” she said.
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