The continued rise in digital advertising spending at Google drove Google's parent company's profit to increase 68% in the third quarter.
Alphabet Inc., Mountain View, California, reported Tuesday that it earned $18.94 Billion, or $27.99 per Share, during the July-September period. Revenue rose 41%, to $65.12billion.
FactSet polled analysts and predicted earnings of $23.73 per sen for revenue of $63.53 trillion. After-hours trading saw shares fall less than 1%, to $2763.
Google is the dominant search engine in the world. It also owns the largest mobile operating system in Android, and the massive video site YouTube. According to eMarketer it holds 29% of global $455 billion digital ad markets. Facebook is close behind. Both tech giants are benefiting from the fact that companies who cut back on advertising during the pandemic have poured more money into marketing.
Google's dominance in search has been under scrutiny for many years. In the United States and other countries, regulators have taken aim at Google over various aspects of its business including search and ads, as well as its app store to limit its reach.
Philipp Schindler, Google's chief business officer, stated that the core business of the company saw 43% growth to $53.13 trillion. Retail was "by far" the biggest contributor to this growth. YouTube ads, which allow users to buy directly from creators' videos, offer the company a lot of potential. YouTube's ad revenue increased 43% to $7.21 Billion in the most recent quarter.
Analyst at Synovus Dan Morgan stated that it seemed like Apple's iOS 14 privacy changes made it harder for companies to target users and track them, were having an impact on results at Snapchat more than at Google. When asked about Tuesday's impact, Ruth Porat, Google's chief financial officer, said that Apple's changes only had a small impact on YouTube revenue.
Google also wants to grab a larger share of cloud computing business. This is where it competes against Amazon and Microsoft. This division saw an increase of 45% to $4.99 Billion, and suffered an operating loss in excess of $644 Million.