Online Advertising Trends, Google Prints Almost IDR 890 Trillion in Revenue

Online Advertising Trends, Google Prints Almost IDR 890 Trillion in Revenue

Google’s parent Alphabet Inc., posted sales of more than IDR 860.23 trillion or equivalent to US $ 60 billion in the fourth quarter of 2021, exceeding analyst projections which were supported by the advertising business. Reported by Bloomberg on Wednesday (2/2/2022), Alphabet’s sales, excluding partner payments, rose 33 percent to $61.9 billion, compared with the average analyst estimate of $59.4 billion. Google’s advertising revenue grew by 33 percent during the holiday quarter. Business growth remained steady amid disruptions in its largest categories, namely travel and retail, due to the spread of the Covid-19 omicron variant and the supply chain crisis.

The company also announced a 20-for-1 stock split, meaning each share held by investors would get an additional 19 shares.

Alphabet has succeeded in extracting money from the increasing use of the internet during the pandemic, such as online shopping and the shift of marketing budgets to online channels. On the other hand, Google earns big revenue from the cloud division and YouTube.
However, the company’s main contributors are still its flagship search business which has benefited from deep investments in e-commerce. “The scale of the combined advertising business is enormous. If you own a business in today’s world, you may have to pay to get that marketing material in front of Google or YouTube users,” said Hargreaves Lansdown equity analyst Sophie Lund-Yates, writing in an after-earnings note.
Alphabet shares were up 8.7 percent after closing at $2,752.88 in extended trading. However, the stock has declined by 5 percent so far this year. JMP Securities analyst Andrew Boone said that Google was profiting from online businesses clicking on its ads, competing with Meta Platforms Inc., and Snap Inc. “Now [Google’s] spending is back,” he said. Google Chief Business Officer Philipp Schindler said retail advertising was the biggest contributor to the investor meetings.
As is known, YouTube launched a new shopping initiative with young creators in the fourth quarter. “We continue to make breakthroughs,” Schindler said in the call. Google’s net income rose to US$20.6 billion or US$30.69 per share. This achievement was above analyst projections of US$27.35 per share. Google’s overall performance was successful surpassing analysts’ estimates, including search advertising, cloud computing and other lines such as hardware and sales in its app store, Google’s network business running ads on other sites grew 26 percent to $9.31 billion, despite pressure from regulators regarding display advertising operations.
The site YouTube earned $8.63 billion during the holiday season, growing 25 percent. This growth is only a slight difference from analyst estimates of US $ 8.76 billion. Currently, his Shorts feature, which is a competitor to TikTok, has been watched 15 billion times per day.

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