Google’s advertising sales have recovered since they plummeted back in March because of the COVID-19 pandemic, parent Alphabet Inc said on Thursday, easing worries about its initial quarterly sales slip in its 16 years as a public company.
- Googles advertising revenue has recovered well since the initial hit caused by the COVID-19 pandemic
- Alphabet shares were barely changed in $1,552
Alphabet shares were barely changed in $1,552, above their pre-pandemic high, after it said revenue dropped 2 percent in the second quarter, less than analysts’ estimate of a 4% decline.
With its mostly free tools for web browsing, video watching and teleconferencing, Google has become a larger part of many consumers’ lifestyles as lockdown orders induce individuals to depend on the internet for entertainment and work. Subsequently, the internet has become more attractive to advertisers than TV, radio and other paths.
Search ad sales at the end of June were about flat with a year ago, marking an improvement from a”mid-teens” percentage decrease in March, Alphabet CFO Ruth Porat informed the analysts.
YouTube ad sales rose 6% in the quarter, and were growing even faster by late June, Porat said. Revenue of ads on partner properties fell 10 percent but were”improving somewhat toward the end of the quarter as advertisers’ pay started to return,” she added.
Alphabet announced a $28 billion boost to its share buyback program. It said it would still hire a big class of recent graduates even as it slashes spending on real estate and other activities.
“What we are looking at is really how to re-imagine what the workplace will look like,” Porat said.
Total costs and expenses rose about 7% from a year ago to $31.9 billion in the second quarter, compared with a 12% jump a quarter ago.
Capital expenditures fell 12% to $5.4 billion, compared with a 3% drop last quarter.
Alphabet’s profit was nearly $7 billion, or $10.13 per share, above analysts’ average estimate of $5.6 billion, approximately $8.29 per share, for the quarter.
Approximately 66 percent of its revenue came from Google search and YouTube ads from 8% from its cloud organisation advertisements sold on associate properties online, and 14 percent from its own program shop and about a dozen smaller companies.
But the company faces challenges across all of those fronts. New data privacy laws, including one which went into effect in Google’s home state of California, are depressing ad prices.
Antitrust regulators across the Americas, Europe and Asia are currently weighing whether Google has stifled competition on its way to dominating research, mobile software and businesses, with a few bodies even considering forcing it divest components of its operations.
About 2,000 employees last month petitioned Google’s emerging cloud industry to scuttle deals with some police agencies, citing racial discrimination concerns. And whether a hiring spree will acquire cloud clients is uncertain. Earnings in the second quarter of about $3 billion were consistent with analysts’ estimates.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Paresh Dave in and Munsif Vengattil. Editing by Shailesh Kuber and Richard Chang.
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