Google’s parent firm, Alphabet Inc, announced quarterly profits on Tuesday that beat expectations and nearly doubled last year — after a booming holiday season for the online ads giant facing anti-trust regulation scrutiny.
The tech giant had net income of US$20.6 billion on revenue that grew 32 percent to US$75 billion in the final quarter of last year, ending the year with a total of US$76 billion in profit.
That was nearly double the US$40 billion annual profit reported for 2020, as the pandemic had already accelerated a shift to online shopping, working and learning that also benefited fellow giants like Amazon.com Inc and Facebook Inc.
Photo: Bloomberg
Alphabet CEO Sundar Pichai cited “strong growth in our advertising business ... a quarterly sales record for our Pixel phones despite supply constraints, and our cloud business continuing to grow strongly” for the success.
In all, Google earned more than US$61 billion in advertising revenue, mostly from online search and its video platform, while its cloud business grew by 45 percent to US$5.5 billion in revenue.
Google’s dominance online has powered it to new heights during the pandemic period, but has also left it in the sights of regulators around the world.
Pichai said during an earnings call that Alphabet is open to “sensible” regulation by Congress, but is “genuinely concerned that they could break a wide range of popular services we offer to our users.”
Some regulatory proposals could have unintended consequences such as weakening privacy and safety, or putting US companies at a disadvantage, according to Pichai.
Just last week, a group of top US justice officials accused Google in lawsuits of tracking and profiting from users’ location data, despite leading consumers to think they could protect their privacy on the tech giant’s services.
These suits are the latest legal threats against Google and other US Big Tech giants, which have long faced probes and court cases but a lack of new national laws that would regulate their businesses.
The courts and legislatures are not moving fast. Two weeks ago, for example, Google appealed a European court ruling that upheld a 2.4 billion-euro fine imposed by Brussels in 2017 for anti-competitive practices in the price comparison market.
Alphabet said its board had approved a 20-to-1 stock split that would make shares more affordable to small investors.
The firm predicts that its growth will continue this year, with digital advertising expected to bring in more than US$171 billion to Google this year, or 30 percent of the global pie, just ahead of Facebook.
“In the fourth quarter, retail was again by far the largest contributor to year-on-year growth of our ads business,” Alphabet CBO Philipp Schindler told analysts.
“Finance, entertainment and travel were also strong contributors,” he added.
The stock was up nearly 9 percent in after-market trades Tuesday at 10:40pm GMT to US$2,990.
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