Google LLC’s parent organization, Alphabet Inc. has revealed the details earning of its two key operations, YouTube advertisement (ads) sectors and cloud service business for the fiscal year (FY) 2019 on Monday, February 3, 2020.
It was the first time that the company disclosed its revenue report on these two operations by the end of the fourth quarter (Q4). As per the CNBC report, the 2019 earnings report of the two operations of Google had limited scope and excluded some areas of the operations that helped in calculating the overall revenue of Google.
Revenue Report on YouTube Ads
Google revealed the annual 2019 earnings reports on its two key operations; YouTube ads generated $15.15 billion in revenue in FY 2019 in which it earned $4.72 billion in the Q4 alone.
The revenue in this segment for the FY 2019 surged as compared to the last year’s figures that it had generated $11.16 billion in revenue with $3.61 billion in the Q4 of 2018. However, the details of earnings in the FY 2019 excluded its non-advertising sectors such as subscription revenues for YouTube TV, which are included in Google’s other revenue segment.
As responding to a question, the CFO of Google and YouTube’s parent company Alphabet, Ruth Porat said that YouTube’s non-advertising segment had earned around $3 billion in revenue in the Q4 of the FY 2019. Without explaining the details, she claimed that the majority of revenues earned from YouTube ads revenue went to advertisement developers and a slim percentage of the revenue remained for the world’s leading tech company.
It was reported by many analysts that the tech company made impressive growth which led to a surge in the overall revenues of the advertising sectors over the last two years. However, since the company has not made a clear separate earnings report for the advertising sector, it is difficult for many analysts to determine how much profits the company made during the FY.
Earning Report on Cloud Business
Google’s cloud business had accumulated $8.92 billion in revenue for the FY 2019 out of which a $2.61 billion revenue was generated in the Q4. Compared to the previous fiscal year of 2018, the company only received a revenue of $5.84 billion for its cloud business and $1.71 billion was generated alone in the Q4 of that year.
As compared to other rival cloud operators including Amazon Web Services (AWS) and Microsoft Azure, Google’s cloud business is a new venture yet a fast-expanding business. In July 2019, Google officials claimed that its cloud service had made $8 billion in annual revenue and is expected to triple its sales volume over the next coming years.
Nevertheless, Google has been under intense surveillance from the federal authorities and state regulators that are looking for any anti-competitive behavior. According to Reuters, a coalition of 50 attorneys general from different states have announced to launch an investigation against Google’s ad business. Alphabet shares declined by about 3.5% on Monday.
I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.
You can reach out to me at: [email protected]