Google's parent company Alphabet's first-quarter profits fell by more than $ 1 billion compared to 2021

Google’s parent company Alphabet’s first-quarter profits fell by more than $ 1 billion compared to 2021

After a record 2021 with an annual turnover of 257 billion dollars, the first time it has exceeded 200 billion dollars in a year, the parent company of Google reports in a document (pdf) that it has started 2022 with a turnover in the first quarter which increased 23% from the same period last year, reaching $ 68 billion.

However, with spending up from 2021, its net profit actually dropped to $ 16.4 billion from last year’s $ 17.9 billion. Research and development costs for the quarter increased by more than $ 1 billion compared to the first quarter of 2021, from $ 7.485 billion to $ 9.1 billion. as the New York Times he notes, last year the company recorded a gain of $ 4.8 billion in its equity holdings and in the first quarter of 2022 it recorded a loss of $ 1.07 billion.

Google’s search business earned $ 39 billion, a significant increase from the first quarter 2021 result of $ 31 billion. Overall advertising business, including Search, YouTube and its various ad networks, managed to gross $ 54 billion in the first quarter alone.

YouTube’s ad revenue also increased, reaching $ 6.86 billion, but showed slower growth than in the past two years during the pandemic. Last year it had grown by about 30 percent, but this year it only increased by 20 percent as competition from TikTok continued to heat up. YouTube responded by expanding Shorts ‘support for creators and viewers, but growth fell short of analysts’ expectations and its stock prices fell about 7% in after-hour trading.

In an accompanying statement, Sundar Pichai, CEO of Google and Alphabet, said, “The first quarter has seen strong growth in Search and Cloud, in particular, which are helping both people and businesses as digital transformation continues. We will continue to invest in great products and services and create opportunities for partners and local communities around the world. “

In a phone call with investors, Pichai drew investments in YouTube Shorts, where daily views hit 30 billion, four times more than a year ago, and that the company is focusing primarily on building a business. great experience. It specifically unveiled plans for a redesigned YouTube experience that will give viewers more control and the ability to comment while watching on a connected TV and increased support for short films.

Earlier this year, Neal Mohan, YouTube’s chief product officer, delved into details on upcoming changes, updates to the editing experience, and more ways creators can make money from Shorts, with Super Chat, content. branded and, finally, shopping at shorts. You can hear him talk about the plans during his appearance The Vergecast with Nilay Patel and Catie Keck.

CFO Ruth Porat said the company expected a “headwind” to growth as more time spent on YouTube Shorts, before more monetization on the platform. We didn’t hear anyone say the word “TikTok”, but it clearly loomed over the conversation.

If you’ve ever looked at how Google reports earnings, then you know it’s generally impossible to tell how well hardware products like the Pixel, Nest, Chromecast, and Android phone fare. Android, Chrome, and all of Google’s hardware ventures are grouped as “Google other” as a sub-category of the overall Google services, which also breaks down the results for Search and YouTube. The “Google other” category raised $ 6.8 billion, about $ 400 million more than last year.

Revenue from Google Cloud, which just launched its multimedia CDN based on the same backbone that carries YouTube videos, is also on the rise, reaching $ 5.8 billion from last year’s $ 4 billion.

Alphabet’s “More Bets”, including its experimental projects such as self-driving company Waymo, healthcare company Verily and Google Fiber, generated $ 440 million in revenue, more than double the previous year’s reported.

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