Late yesterday Alphabet, which is what Google has become since their 2015 restructuring made their 2019 revenue reports available to the public. Of course Wall Street was the first to pick up the reports and ate their way through it to see if it matches all expectations. It did not; shareholders were not happy.
Alphabet announced a total revenue of US$ 46 billion for 2019. That is a fair 17% increase from 2018. Sounds healthy, right? Wall street and shareholders though are expecting nearly a billion more in revenue though. Google missed the mark by about US$ 800 million.
US$ 800 million is quite small compared to the US$ 46 billion that they have made. Or, so you thought. Apparently it is quite a big deal in the market since every other competitor is reporting a huge surge in their own ad game. People like Amazon, for example reported a large jump on their ad revenue in 2019.
Still, Google also made sure that their shareholders are happy by also announcing that out of the US$ 46 billion of revenue, US$ 10.6 billion of those are profits. That number is bigger than estimated by Wall Street too. At least that is that.
They broke down where their money was made too within the Alphabet empire. Google cloud business, that is their Drive, Docs, Sheets and what not, makes up US$ 8.91 billion in total. YouTube, our beloved red play button on our smartphones makes up US$ 15.5 billion in revenue for 2019. That is just from Ads.
One of the bigger contributing factors of Alphabet disclosing YouTube’s earnings this year, as suggested via experts, is that the organisation as a whole failed to meet revenue expectations. The numbers, as per presented by Alphabet, indeed are quite staggering and mind boggling. The disparity could be due to a number of reasons; we cannot know for sure until Alphabet says something. The earnings number alone though tells us that the tech giants are still here to stay and they are still quite untouchable for now.
Still, the fact that YouTube, a platform that we all use for free makes US$ 15.5 billion is quite mind boggling. That is six times more than Twitch and one sixth of Facebook’s ad platform. Yes, we apparently still spend more time on the blue ‘f’ logo app than the social video platform. Then again, Facebook’s platform is plenty more versatile.
The ad revenues are not about to dwindle down anytime soon though. We cannot get enough of YouTube, you have to admit that. Annoying ads will not stop us from watching our favourite videos. But there is a bigger picture in play here though.
YouTube as a platform, thanks to the now disclosed US$ 15.5 billion in ad revenue, will grow even bigger. There will be more people that could potentially see more money in YouTube. While that means that there will be even more content for us to enjoy, that could also spell more ads being shoved in your faces. It is quite inevitable though; the more you consume, the more of a target you become.
