Google owner sees record profits as lockdown boom continues
Google owner Alphabet saw its earnings soar in the first quarter as people stuck at home in the pandemic used more of its services. Net profit jumped by 162% to a record $17.9bn in the three months to March as advertising revenue swelled by a third.
It comes as the tech giant faces increased scrutiny over its power and the pandemic has people turning to the internet more than ever. The firm credited “elevated consumer activity online” for its results.
“Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained,” said Alphabet and Google chief executive Sundar Pichai.
Analysts had expected a good performance as economies around the world have continued to reopen, prompting more spending on online advertising. Reflecting this revenue at Google’s search business jumped by 30% to $31.9bn in the quarter , while sales at YouTube leapt 49% to $6bn.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said Alphabet had “lapped up the rewards from the pandemic like a big cat pouncing on cream”.
“While famous for its start-up culture and offices, this tech giant is, rather unspectacularly, an advertising business,” she said.
“Covid means phenomenal sums of money have shifted to online shopping, so Alphabet’s impenetrable family of digital advertising businesses have seen revenue skyrocket.”
The only problem facing the tech giant is continued regulatory action over issues such as competition and privacy. The latest dispute emerged on Monday when streaming TV technology company Roku accused Google of engaging in anticompetitive behaviour to benefit its YouTube and hardware businesses.
Meanwhile, US and European regulators continue to discuss tightening oversight of Google and other tech giants, but have yet to agree legislation. On the back of the strong results, shares in Alphabet rose by 4.5% in after-hours trading.