For Alphabet — and by extension, Google — will more of the same be enough?
To that end, Google parent Alphabet will report earnings after the bell Tuesday (Feb. 2) that will likely show continued momentum in an age where working from home and shopping from home have become firmly entrenched — and as a result, companies of all stripes have had to make the leap into a digital-first existence.
In other words: Keep an eye on the cloud business.
In terms of consensus expectations, the Street is looking for the tech giant to earn $15.98 per share on $53.1 billion in consolidated top line, compared to the $15.35 per share and $46.1 billion earned last year.
Within those results will be evidence of whether the company has sustained double-digit gains in ad spending, as evidenced by YouTube, where ad-related revenues were up 32 percent year on year. High-tech initiatives have also been gaining traction, as Google Cloud was up 45 percent (with demand from the work-from-home economy underpinning that growth) to $3.4 billion.
As reported late last year, parent firm Alphabet reported in October that advertisers had been spending money again, in anticipation, of course, of end market demand. Overall search and other advertising revenues were up 6 percent year over year to $26.3 billion. Ad revenues were up 9 percent to $5.7 billion.
Within Google’s core businesses of search, and with a nod toward Google Maps, the company has said it displays information of millions of businesses that offer contact delivery or pickup. As is germane to commerce, the company also has added price comparisons.
CEO Sundar Pichai said on the conference call with analysts that its cloud and commerce “investments are also benefiting merchants and advertisers and helping them recover,” he said. “As of today, merchants can list products for free on our shopping tab in 48 countries around the world … If you’re a small-business owner, you can set up your first campaign [and] create your first ad in 15 minutes from your mobile device.” The firm also has opened its platform to PayPal and Shopify and has said, anecdotally on earnings call that Google Pay activity has been strong.
Keeping An Eye On Google Cloud
Google Cloud seems to be a key factor in helping move the company more firmly into commerce and, particularly, eCommerce.
As reported late last month, Google Cloud announced Product Discovery Solutions for Retail, billed as a a new suite of services that will use artificial intelligence (AI) and machine learning (ML) to help eCommerce firms deliver personalized consumer experiences during a shopping journey’s initial phase. Within that suite, Google’s new Recommendations AI engine enables retailers to deliver highly personalized product recommendations at scale across all channels. Vision API Product Search allows shoppers to search for products using an image, receiving a ranked list of “visually and semantically similar” items, while Google Cloud Search for Retail offer enhanced search functionalities.
While not broken out as a specific line item, Google Play and YouTube subscription and hardware are contained in the “other revenues” category, which was up 35 percent to $5.5 billion.
We’ll likely get at least some commentary about the Justice Department antitrust suit against Google — though likely not much beyond general commentary.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More