Google advertising business propels 41% rise in Alphabet revenue

Google parent Alphabet reported revenue of $75.32 billion (+32 percent) and operating income of $21.885 billion with 29 percent operating margin for Q4 2021.
Google South KoreaGoogle’s revenue touched $257.637 billion (+41 percent) and operating income was $78.71 billion with 31 percent operating margin for full year 2021.

Google’s internet advertising business surged on consumers using Google search as they shopped online and advertisers upping their marketing budgets.

Online consumers dove into Google search looking for apparel and hobbyist items, while retail, finance, entertainment and travel advertisers raised marketing budgets, Google’s chief business officer, Philipp Schindler, said on an earnings call.

Analysts said Google, which generates more revenue from internet ads than any other company, is proving that its growth is unstoppable for the foreseeable future.

“The pandemic has handily accelerated the world’s reliance on digital advertising,” said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown. “Sitting through traditional TV advert breaks or reading billboards suddenly feels completely archaic in the age of streaming and mobile phone addiction.”

For the 2021 full year, Alphabet’s sales rose 41 percent to a record $258 billion. Sales had grown just 13 percent in 2020, the slowest rate in over a decade, after advertisers slashed spending in the first few weeks of the pandemic.

Across both 2021 and 2020, Google’s advertising business, including YouTube, accounted for 81 percent of Alphabet’s revenues.

Google Cloud increased quarterly revenue by 45 percent to $5.5 billion. The Cloud division’s operating loss narrowed by 45 percent to $3.1 billion in 2021.

Alphabet Chief Executive Officer Sundar Pichai told analysts that Cloud is exploring how to support clients that want to use blockchain.

Ruth Porat, CFO of Alphabet and Google, said: “Our fourth quarter revenues of $75 billion, up 32% year over year, reflected broad-based strength in advertiser spend and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud. Our investments have helped us drive this growth by delivering the services that people, our partners and businesses need, and we continue to invest in long-term opportunities.”

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