The search engine giant got billions of more dollars from a post-pandemic resurgence in advertising demand
As the search giant got billions of more dollars from a post-pandemic resurgence in advertising demand, Google’s parent company Alphabet has powered to record profits.
In addition to Microsoft revealing record figures, it also predicted that rising inflation fears around the world would force more employers to spend on technology and automation.
On the other hand, with growing sales both from its profit-spinning search engine and the YouTube video site, Alphabet, which owns Google and a host of loss-making side projects from driverless cars to delivery drones, revealed that revenues in the third quarter of the year had climbed by 41% to $65bn (£47bn).
Although the company embarked on a hiring spree that means it now employs more than 150,000 people, its quarterly profits rose 68%, from $11.2bn to $18.9bn.
During the early months of the pandemic last year, Alphabet suffered its first-ever decline in revenue as advertising for Google’s key areas such as travel and jobs ground to a halt. But, the company has rebounded strongly from reopening.
Shares have climbed by 62% this year before last night, which is the biggest surge for any of the major tech companies. They were flat in after-hours trading following the results.
In that context, the company faced an unprecedented regulatory onslaught in its home market. Nevertheless, it managed to publish record figures.
All these gains are not without hiccups. The US government is suing Google for allegedly using unfair tactics to maintain its dominance of web search, and several of the states in the country have already sued the company over its advertising business and its Android app store.
Google is not the only technology firm that has posted impressive results this year. Microsoft revenues posted a 22% increase, to reach $45.3bn. The company said that profits had climbed by 48%, to $20.5bn.
Its cloud-computing unit, Azure, which thousands of companies rely on for online hosting and data processing, was the company’s fastest-growing division.
As businesses face rising inflationary pressures such as wage increases, its chief executive, Satya Nadella predicted that demand for the company’s products would pick up. He said:
“Digital technology is a deflationary force in an inflationary economy. Businesses – small and large – can improve productivity and the affordability of their products and services by building tech intensity.”
Last night when the microblogging service Twitter also reported quarterly figures, it posted an increase in revenue and shares rose as the company said the cost of Apple’s recent privacy changes to the iPhone had been less severe than feared.
Both Snapchat and Facebook have said in recent days that the change had been costly. But Twitter said that the impact had been “lower than expected”.
However, Twitter fell to a $743m loss as it swallowed the cost of a recent $810m lawsuit from shareholders over the company’s New York floatation in 2014.