Alphabet, the parent company of Google, sees its profits soar as ad revenue rises.
Alphabet, the parent company of Google, posted a nearly quadrupled quarterly profit on Tuesday, thanks to advertising revenue from its search engine and YouTube video platform.
Sundar Pichai, Alphabet’s CEO, said of the quarter, “There was a growing tide of online activity in many parts of the world, and we’re delighted that our services assisted so many people and companies.”
The internet behemoth recorded a nearly threefold increase in earnings from the previous year, to $18.5 billion, on revenue of $61.9 billion.
As the epidemic pushed a trend toward working, shopping, socializing, and more online, Google was among the tech companies that reported increased usage.
After the revelation of the earnings results, which exceeded market forecasts, Alphabet shares, which had ended the formal trading day marginally lower, soared more than 4%.
Pichai attributed the internet giant’s success to long-term investments in artificial intelligence and cloud computing.
According to chief financial officer Ruth Porat, the strong quarter reflected “elevated consumer online engagement and broad-based momentum in advertisement spend” as the global economy works to recover from the pandemic’s effects.
Pichai began an earnings call by asking people to acquire Covid-19 vaccines.
According to eMarketer, Google is on target to produce $130 billion in overall ad income this year, up 25% from the previous year.
According to the market tracker, this would give the California-based tech behemoth 28.6 percent of the global digital ad market, with Facebook in second place with just under 24 percent.
eMarketer lead analyst Nicole Perrin said, “YouTube was the fastest-growing segment during the quarter, indicating the continued effectiveness of video advertising for both direct response and brand goals.”
According to Pichai, Google’s cloud computing division, which competes with Amazon and Microsoft, is positioned to attract more business due to its strengths in analyzing data for businesses and guarding against threats like ransomware.
On an earnings call, Pichai told financial analysts, “Companies have actually started thinking seriously about their vulnerabilities.”
“We are clearly seeing a lot of conversations; a lot of interest” in this area.