UPDATED with comments from earnings’ call: Google’s YouTube saw ad revenue jump last quarter, passing $7 billion from $3.8 billion a year ago. The video giant’s parent Alphabet saw overall sales surge to nearly $62 billion from $38 billion, beating Wall Street expectations across the board.
The numbers come amid a rain of big tech earnings today including Apple and Microsoft, and following stellar performances by Snap and Twitter last year that demonstrated the strength of digital advertising. Google said retail was the biggest contributor to ad sales, along with travel, financial services and entertainment. CFO Ruth Porat cited a “rising tide of online activity in many parts of the world” in the second quarter, reflected in the massive revenue.
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Subscription services YouTube Premium and YouTube TV as well as in-app purchases, digital content products and hardware like Fitbit are grouped in a sector called “other” within Google Services. That saw revenue rise to $6.5 billion last quarter from $4.4 billion the year earlier but the company doesn’t break out the components and its really hard to get any color.
Alphabet CEO Sundar Pichai was asked during a post-earnings analyst Q&A if the company — which is looking at something like $200 billion in digital ad revenue in 2021 based on last quarter — is thinking about diversifying that. He said yes, sort of, noting among others things that YouTube has both a subscription and an ad-based component and that he is committed to both long term.
The company is also investing in Google Cloud, AI and, through Waymo, self-driving cars. Google is also pushing on e-commerce. YouTube also just rolled out a TikTok rival called Shorts and incentives to creators to use it.
The giant company sees huge benefits from connected, or smart, TVs and is investing heavily with TV providers and cable box manufacturers on that. Google has a major interest in “televisions becoming computing devices over time,” Pichai said.
Neither Pichai nor Porat on the call were asked about or mentioned regulatory issues that have bubbled up for tech giants this year. Earlier this month, 36 states filed antitrust suits against the giant over its Play Store for Android — the fourth antitrust lawsuit government enforcers have filed against Google in the last year.