Alphabet's revenue fell for the first time in history in Q2 2020
Advertisers' spending cuts amid slowing economic growth due to the pandemic have led to a drop in revenue for Alphabet, the holding company that owns the Google search engine. The company's revenue, which is almost entirely dependent on advertising revenue, declined for the first time in history.
Alphabet generated $38.3 billion in revenue for the second quarter of this year, compared to $41.1 billion in the previous quarter of 2020 and $ 38.9 billion in the second quarter a year earlier (-2% year-on-year). Net profit year-on-year decreased even more significantly-from 9.947 billion to 6.959 billion dollars or almost a third. Perhaps since the company continued to increase its staff even during the crisis — it added four thousand new employees during the reporting period, increasing to 127,498 people.
Google's search engine revenue fell the most — from $ 23.6 billion to $ 21.3 billion. Revenue in the "other bets" category, which includes innovative projects like Waymo, which develops self-driving cars, Or verily, a biomedical company, fell from $ 162 million to $ 148 million. At the same time, Alphabet continues to lose money on these innovations — the operating loss of the direction was 1.12 billion dollars. But video hosting YouTube, on the contrary, was able to earn more in the quarantine on advertising than a year earlier — 3.81 billion dollars against 3.6 billion in the second quarter of 2019.
At the same time, revenue growth was also shown by the Alphabet's cloud business — by almost 50% year-on-year, from 2.1 to 3.01 billion dollars. Google's non-advertising revenue also increased — this includes, for example, consumer electronics such as Google Home smart speakers, Nest smart home devices, and Pixel smartphones. This direction brought Alphabet revenue of $ 5.12 billion, compared to $ 4.08 billion in the second quarter of 2019.
According to Google CEO Sundar Pichai, although the economic climate remains fragile, by the end of the reporting period, the company noticed "the first signs of stabilization": Internet users "began to return to commercial activity."