The Pandemic Hit Alphabet/Google Hard

Posted on July 31, 2020 by Paul Thurrott in Google with 14 Comments

Google reported its first-ever revenue decline in the most recent quarter and attributed the poor performance to the impact from COVID-19.

Alphabet reported a net income of $9.9 billion on revenues of $38.9 billion in the quarter ending June 30. Revenues declined 2 percent year-over-year, a first-ever decline. 99.3 percent of those revenues came from Google, with Alphabet’s “other bets” posting yet another operating loss.

“In the second quarter our revenues were driven by gradual improvement in our ads business and strong growth in Google Cloud and Other Revenues,” Alphabet and Google CFO Ruth Porat said in a prepared statement. “We continue to navigate through a difficult global economic environment.”

Google’s business is dependent on online advertising, which accounted for 84 percent of Google’s overall revenues. But the business only saw small gains in the quarter. Google says that its advertising business improved over time, but that it wasn’t sure whether the rebound would continue into the current quarter.

“We believe it is premature to gauge the durability of recent trends, given the obvious uncertainty of the global macro environment, Ms. Porat said.

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Comments (15)

15 responses to “The Pandemic Hit Alphabet/Google Hard”

  1. george_semple

    Any comments on Huawei edging out Samsung to become the top vendor for Q2?

  2. Thomas Parkison

    Yet Apple posted a great quarter.

  3. lvthunder

    Google would be in serious trouble if they were ever broken up.

    Does YouTube fall under Google or is it in the other bets category?

  4. aelaan

    There are a lot of companies holding off on extending or going into new agreements. Our company thrives on security and for some companies it is just no longer a priority after the first 5 months of waffling.

  5. waethorn

    They shouldn't have spent all that money on painting up 50's girl bikes.

  6. Pungkuss

    Google had a OK quarter. The pandemic caused a 10% dip in search revenue. That is solely caused by the pandemic, no structural flaw in the business. Still had record people using their properties. This means when a recovery comes they will be fine.

    Hardware companies like Apple made money because people needed stuff to work from home with, but what happens after. Will people buy stuff during the back-to-school/Christmas spending period?

    As for Google they had a 53% growth in the cloud, growth in YouTube, growth in other revenues (Youtube TV/hardware etc). I am gonna wait for their stock to drop a bit then put some money in the stock.

    As for Anti-trust I believe they will need to split up the sites (placing ads on sites) business that they have. This, according to Sundar is a small part of their business, so it makes sense. They make more money off their own sites anyhow. This will mean they can strip all the junk out of Chrome and essentially kill a shit load of business on the web, but the benefit is a faster chrome.

    • Paul Thurrott

      Google should have seen an explosion in revenues, not a 10 percent drop, which is still a double-digit drop. And the difference isn't 10 percent, it's 10 percent plus whatever that gain would have been. Microsoft's revenues were up 13 percent, Apple's were up 11 percent. Those are roughly 25 percent differences compared to Google. That's massive.
      • Greg Green

        In reply to paul-thurrott:

        Yeah, this is a bit of a puzzle. People who used PCs at work would’ve still been using them at home, and those that didn’t need PCs at work but now used them at home for remote work should've resulted in an increase in internet use.

        As well as incidental things like a relative’s funeral I viewed over Zoom, there should’ve been more internet use and more opportunities for ad revenue.

        Since many working at home would have no one looking over their shoulder there should’ve been more tabs opened to Amazon, etc, to ease the boredom and burden of working. Yet more opportunities for advertising.

        Maybe more businesses are realizing the advertising provided by google aren’t worth the cost.

  7. red.radar

    Possible the brand is damaged? I find the advertising dip odd considering all the online content consumed and customer engagement during the pandemic

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