Google’s saw its profits soar in the fourth quarter revenue disclosure as reported by Google’ Parent company, Alphabet, despite it seeing a crisis of trust in its growing YouTube video platform. The operating profits for Google Parent company Alphabet grew by 15 percent or about $7.7 billion in the fourth quarter.
Its revenue climbed to an all-time high of $32 billion from $26billion reported last year. This came over the illusions created by the analyst who claimed the company going through bad times and might report a lowered revenue this quarter. Alphabet’s earnings per share came in under expectations at $9.70 and the tech giant took an $11 billion tax provisions sending its stock down in aftermarket trading.
As per Ruth Porat, Chief Financial Officer of Alphabet Inc. believes that such strong growth for the company was led by the mobile search in the recent times as the availability of such system has grown strongly in the recent years. The company has also felt a strong presence from desktop search and YouTube from the mobile users. The revenue from Google’s ad business also grew by 21 percent from last year and accounts for 84 percent of Alphabet’s total revenue. The company’s expansion beyond the Internet search and video platforms has started to pay off as it has ventured into cloud platform which competes with Amazon and Microsoft. It generated $1 billion in revenue per quarter which is really wonderful considering that it sidelined itself completely from Google.
But the technology-based companies like Google, Facebook and Apple have had to undergo severe scrutiny in the past few months of their power and influence on the society thereby provoking analysts to see a dip in their business and revenue collection as well.
Google has been seeing and steering itself out of controversies regarding the backlash received by YouTube in the recent months from advertisers, content creators, parents, and users who say that the site fails to effectively enforce its rules banning disturbing and offensive content at times which is consumed regularly by millions without any human review. Google has tried to mend the same by introducing manual disclosures on YouTube. It also removed more than 100,000 developers on Google Play creating more than 700,000 applications which violated norms of the company.
Sundar Pichai, Google’s Chief Executive had signaled that its Video site YouTube will be responding to the outcry. “In addition to the significant work we are doing to protect users and stop abuse on the platform, just a few weeks ago we announced changes to advertising on YouTube.”
These changes would definitely bring stricter criteria for the types of videos receiving ad dollars and more manual reviews of content also. He also defended YouTube’s popularity saying that 1.6 billion people watch videos on it every month.
Not only has Google benefited from the soaring mobile penetration, the affiliate marketing sponsored through digital means have also soared up in the recent times with eMarketer expecting Google to command more than 42 percent of U.S. Market share for the digital advertisement in the coming years while it believes that Facebook will have authority over 23 percent of such advertisements. some Analysts have also viewed the Alphabet as a pioneer not only in advertising but also in various other forms. Eric Sheridan, an analyst with UBS told some investors through a note earlier this month that Google is highly placed for developments in some of the most important areas of technology notably Mobile, Machine Learning and Cloud Computing.