Alphabet profit explodes expectations thanks to advertising

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Driven by online advertising during the holiday season, Alphabet far exceeded expectations in the last quarter of 2020, with net profit of $ 15.2 billion (12.6 billion euros), up 50% on a year.

The parent company of Google has garnered a turnover of 56.9 billion (47.2 billion euros), or 10 billion (8.3 billion euros) more than a year ago, well beyond the 53 billion (44 billion euros) expected by analysts; its title appreciated by nearly 7% during electronic exchanges after the close of the stock market.

These strong results “were driven by Search (Google’s search engine) and YouTube as our customer and sales activity rebounded from the start of the year,” Ruth Porat, CFO of the year, said in a statement. ‘Alphabet.

Leader in online advertising

Like its rivals Amazon, Apple or Facebook, Google has expanded its empire during the pandemic, the demand for its services being even stronger with the various containment measures.

Read more: Google sued for its ad management

The tech giant is above all the world leader in the online advertising market. Google collected 46 billion dollars (38.2 billion euros) in advertising revenue in the last quarter of 2020, including nearly 7 billion (5.8 billion euros) generated on the video sharing platform YouTube.

In the spring, the Californian group had stumbled, with a net profit lower than that of 2019, because of its exposure to the advertising budgets of large advertisers hard hit by the pandemic, such as tour operators. “The three main categories of advertising revenue exceeded our expectations, including YouTube, which increased 46% in the 4th quarter compared to the previous year,” notes Nicole Perrin, analyst at eMarketer.

Cloud computing on the rise

This research firm forecasts 116.7 billion (96.9 billion euros) of net advertising revenue for Google in 2021 (+ 18.4% over one year), or nearly 30% of this market.

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The remote computing branch (cloud computing) generated $ 3.8 billion (€ 3.1 billion) from October to December, up $ 1.2 billion (€ 1 billion) compared to the previous year.