Google’s advertising business outperformed expectations in the three months to October, propelling revenue and earnings of parent Alphabet through the roof. The search giant brushed off a landmark antitrust lawsuit from the US government, while its its core search business returning to growth after the pandemic precipitated Google's first-ever business contraction in July.
Google bounces back
Google parent Alphabet recorded third-quarter net income of $11.25bn, far ahead of the $7.06bn income recorded just a year ago as Silicon Valley’s FANG quartet find their teeth again.
Revenues saw a commensurate rise, jumping to $38.01bn from $33.01bn over the same period once traffic-acquisition costs are discounted.
Advertising revenues also rose, chasing off the previous year-on-year declines by increasing from $33.8bn to $37.1bn over the period.
YouTube ad revenues also didn’t disappoint, rising from $3.8bn a year ago to $5.04bn. Completing this rosy picture, Google Cloud sales also headed in the right direction, jumping from $2.38bn to $3.44bn.
Appraising investors of the current state of play Ruth Porat, chief financial officer of Alphabet and Google, said: “We’re pleased at the degree to which advertisers reactivated their budgets in the third quarter."
Porat also credited tightened content moderation policies for YouTube's rise, adding: “YouTube’s strong watch time growth enables advertisers to reach audiences they can’t reach on TV.”
Striking a cautionary note Google chief Sundar Pichai attributed the turnaround largely to a brightening picture across the board for the internet economy, as opposed to any specific measures adopted by the search giant.
Noting that people were now reliant on online services for work, shopping and entertainment Pichai said this rising tide had pushed Google to "a strong quarter, consistent with the broader online environment."
YouTube boasts over 30m premium and music subscribers, with a further 5m currently enjoying free trials.
YouTube TV also commands the attention of 3m subscribers, a particularly impressive feat after a hefty price increase from $50 to $64.99 was introduced in June.
Intriguingly views of guided meditation videos have skyrocketed as people seek solace from the chaos outside by finding inner peace. Other topical areas to command attention include DIY face mask tutorials which have been viewed over 1 billion times.