Google profits rise 68% to $18billion - highest growth in decade

Google's parent company Alphabet recorded the highest growth in a decade as it announced annual profits of $18.9billion - a 68 per cent jump in the third quarter of the year.

Alphabet's highest ever revenue of $65.1billion in the recently-ended third quarter eclipsed the same period last year by some 41 percent, with ads on its Google search engine and YouTube video sharing platform credit with helping drive the bonanza earnings.

Both figures exceeded analysts' expectations for Q3, which had predicted profits of $16.2 billion and sales - revenue - of $63.5 billion.

The company, which announced an operating income of $21billion, is on pace to have 28.6 percent of the global digital advertising market in 2021, according to eMarketer, just ahead of Facebook's 23.7 percent share, as online purchasing soared during lockdown.

Google generates hundreds of billions of dollars of revenue a year by selling ads that appear along with its search results, in addition to ads that appear on sites across the internet.

A bombshell unredacted lawsuit, unsealed Friday in the U. S. District Court of the Southern District of New York, revealed that Google takes between 22 percent and 42 percent of all online ad spending that they facilitate on behalf of advertisers and publishers.

The suit alleges that Google has taken actions to 'lock in' advertisers and publishers, leaving companies little choice but to use Google's own ad serves, as the tech giant controls the dominant tool for placing ads online and runs the primary platform that links consumers and sellers. That has sparked antitrust

Google's revenue results topped analysts’ estimates of $16.2billion in profit and sales of $63.5 billion.

'This quarter's results show how our (artificial intelligence) investments are enabling us to build more helpful products for people and our partners,' said Sundar Pichai, CEO of Alphabet and Google.

'As the digital transformation and shift to hybrid work continue, our Cloud services are helping organizations collaborate,' he added.

Google remains a centerpiece of online activity, with offerings such as its search engine, ad marketplace, and YouTube video platform that give it extensive global influence.

Experts say its strong financial performance demonstrates the value of the company's search engine and YouTube video platform, which are two of the internet's prime locations.

It also shows how e-commerce advertisers have been particularly lucrative for Google, as have been advertisements on its YouTube video platform.

From July to September, YouTube sold $7.2billion of advertising space targeted according to content and users, against $5billion in the same period last year, according to Alphabet.

Its remote-computing business saw nearly $5billion in revenue, up 45 percent over the previous year.

The surge in Alphabet's earnings comes as the tech giant faces increased scrutiny from regulators regarding its power.

Google is among internet giants in the crosshairs of regulators and critics concerned about whether they unfairly dominate markets and fend off competition.

South Korea's antitrust watchdog fined Google nearly $180million in September for abusing its dominance in the mobile operating systems and app markets, it said, the latest in a series of regulatory moves against tech giants around the world.

The company also faces an antitrust lawsuit in New York as the Attorneys General of 16 states, led by Texas, and a string of companies accuse Google of utilizing its stranglehold over search engine marketing and the buying, selling and serving of online advertisements to increase profits for itself.

'[T]he analogy would be if Goldman or Citibank owned the NYSE [New York Stock Exchange],' one senior Google employee said, according to the lawsuit.

As the primary gateway for users surfing the web, the suit alleges, Google has comprehensively - and purposely - limited the ability of other companies to reach consumers.

The court filing further alleges that the company has used its monopoly to benefit itself, while simultaneously harming consumer... (Read more)

Latest News