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Google owner has first drop in history in billing

by Ace Damon

Not that this result was not expected in the middle of the pandemic, but Alphabet, owner of Google, recorded for the first time in its history a drop in revenues. We second quarter 2020 financial results, released on Thursday (30), the company reported revenue of US $ 38.3 billion (R $ 199.7 billion), a reduction of 2% compared to the same period last year.

The 2% drop in revenue is in contrast to the 19% growth recorded in the second quarter of 2019. The company earned $ 3.81 billion from ads on YouTube, an annual increase of 5.6%, but the segment which encompasses the search fell by almost 10%, to US $ 21.3 billion. Last quarter, Alphabet had already said that the advertising business would be going through a difficult time.

CFO Ruth Porat tells the CNBC that the slight drop occurred due to the improvement of the market at the end of the quarter, when users started to search for more “commercial” keywords and companies started to increase their advertising expenses. Still, Alphabet says that, due to market uncertainties, it is premature to say whether this trend will be lasting.

At least Google Cloud is doing well, thanks. The division that includes the G Suite productivity package reached US $ 3 billion in revenue, up 43% compared to the second quarter of 2019. In addition to the greater use of distance communication tools by companies, the segment made more money because Google raised prices for the service.

Although Google accounts for almost all Alphabet’s revenue, the holding is also comprised of science company Verily, Waymo’s autonomous cars and other businesses. The segment classified as “other bets”, in English, if you insist on the pun) did not do well: the revenue, which was only US $ 162 million in the same period of 2019, fell to US $ 148 millions.

Alphabet’s net profit was $ 6.96 billion (R $ 36.3 billion), down 30% year-on-year. In addition to Google’s worsening, Alphabet’s other bets registered an increase in losses, to $ 1.1 billion, which pulled the financial result down.

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