Google remains a pandemic winner

Corona cannot harm Google, on the contrary: the technological surge that has been observed since the outbreak of the pandemic has helped parent company Alphabet to achieve strong growth this year as well.

The corona pandemic, with shops closed around the world and exit restrictions, caused the advertising income of Google’s parent company Alphabet to bubble up vigorously in the first quarter of this year. Overall, revenues climbed 34 percent to $ 55.3 billion. The boost reflects the increased online activity of consumers, said CFO Ruth Porat. In addition, many retailers have completely relocated their advertising to the Internet in order to even reach their customers in lockdown. At Google, which still makes up a large part of the alphabet business, revenues from the search engine business rose by 30 percent to almost 32 billion dollars. The video platform Youtube contributed a good six billion dollars, around 50 percent more than a year earlier. Alphabet benefits from the fact that people in lockdown are increasingly surfing the Internet, ordering their food there, shopping or watching films and videos on YouTube for entertainment or listening to music.

Ads linked directly

Experts also explain the fact that YouTube has increased its revenue so much by the fact that advertisers link their products directly in the videos and thus lead viewers more easily to their online shops. That makes the video platform even more attractive for advertisers. In the high-margin cloud business, too, the company was able to increase its income significantly, by 46 percent to a good four billion dollars. Because the group managed to limit the rise in costs at the same time, the profit of the entire company jumped from 6.8 to 17.9 billion dollars in the first three months. That was significantly more than industry observers expected. Investors rewarded the numbers with a price increase of around four percent at times in after-hours trading.

Epic Games’ lawsuit

With business going so well, the company could afford to lose over $ 1 billion in other “promising” lines like self-driving cars or delivery drones, with revenues of less than $ 200 million. But Google’s business model, which is focused on advertising revenue, is under increasing pressure. The video game manufacturer Epic Games accuses not only Apple but also the search engine operator of unfair competitive practices. Both companies have thrown Fortnite from their app stores because Epic Games no longer wanted to pay the usual commission fee. How this dispute will end is still largely open.