Google’s parent Alphabet Inc. (NASDAQ: GOOGL) has released YouTube's earnings report for the first time since acquiring it in 2006.
Alphabet’s fourth quarter and fiscal year 2019 results announced on December 31, 2019, indicate that YouTube ads brought in $15 billion last year, which accounts for nearly 10% of Alphabet’s overall revenue.
In 2018, YouTube ads had generated nearly $11 billion. Quarterly, , YouTube ads generated $4.7 billion in Q4 2019 and $3.6 billion in Q4 2018. The total revenue for Alphabet in 2019 stood at $161.85 billion. In 2018, the figure was $136.81 billion. Alphabet’s revenue grew 18% in year-on-year terms.
Why it Matters?
Sundar Pichai, who took over the helm as CEO in 2019 after co-founders Larry Page and Sergey Brin relinquished control over Alphabet said in the results statement, “To provide further insight into our business and the opportunities ahead, we’re now disclosing our revenue on a more granular basis, including for Search, YouTube ads and Cloud.” He described YouTube as one of Alphabet’s “newer growth areas” alongside Cloud, which, according to Pichai, is now on a $10 billion revenue run rate.
Investors have been demanding sales figures from Google but were disappointed at the release of the detailed numbers. The $15 billion a year figure is far below what had been previously estimated. YouTube’s ad revenue is one-fifth the size of Facebook’s but is six times larger than that of Amazon run Twitch. On the cloud services side, in terms of quarterly revenue growth, Google’s Cloud grew at 53%, but rival Microsoft’s Azure grew 62% quarterly.
Alphabet shares traded 3.48% higher at $1,482.60 at press time on Monday.