Google reveals YouTube revenues for first time (as traditional ads start to slow)

Feb 4, 2020 | Ad tech, Online advertising, Paid search, Programmatic, Search engine marketing, Video, Viral

Alphabet hit by ‘significant slowdown’ in ad sales, but ad revenue surges
Google's parent company Alphabet has published details of its YouTube and cloud business for the first time, as the firm's traditional search and banner ad businesses continues to slow.

YouTube’s ad sales in the last three months of 2019 rose 31% year-on-year to $4.7bn (£3.62bn), the company said.

Overall Alphabet revenue increased by 17% year-on-year to $46bn, marking the slowest rate in more than two years.

While YouTube is rapidly growing, Alphabet’s cloud business lags rivals, accordingto figures released for the first time.

Alphabet said it earned $2.6bn in cloud revenue for the most recent quarter – compared to almost $10bn at Amazon. However it is fast-growing, rising more than 50% year-on-year.

Alphabet and others make money in cloud computing by charging companies to host their data remotely, rather than firms maintaining their own servers.

Alphabet shares fell more than 4% in after-hours trade.

For years the business did not publish revenue figures for its various divisions, to the concern of investors and regulators.

When Sundar Pichai took over as Alphabet chief executive last year the policy changed, although it is still not releasing profit figures for individual units.

Alphabet reported quarterly profits of almost $10.7bn, up 19% year-on-year, while costs rose 18% to $36.8bn, as the firm invested in data centres and hired new staff. Google’s advertising revenue increased 17% to almost $27.2bn.

YouTube now counts about two million paid subscribers, Mr Pichai said.

At more than $15bn for 2019, YouTube’s ad business accounted for almost 10% of Alphabet’s overall revenues last year – but the firm also said it shares a large portion of YouTube ad revenue with people posting videos.

Pichai said the firm sees opportunity to make even more money off its YouTube adverts, including by targeting them more precisely.

“We see that as a big opportunity and are investing for it,” he said.

All topics

Previous editions

Get email edition

Share This