Alphabet beats estimates thanks to COVID-19 advertising boom
Google-owner Alphabet has reported results for the first quarter of 2021, beating estimates including revenues, which reached $55.31bn vs an expected $51.70.
Net profit, meanwhile, jumped to $17.9bn in the quarter. Revenue for its bread and butter search business was up 30% to $31.9bn, while its video sharing platform Youtube was up by almost 50%, reaching $6bn.
COVID-19 changes online patterns
Sundar Pichai, CEO of Google and Alphabet, : “Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We’ve continued our focus on delivering trusted services to help people around the world. Our Cloud services are helping businesses, big and small, accelerate their digital transformations."
Advertising profits had a huge part to play in the results, with Google’s ad business accounting for 81% of revenue overall. In an earnings call, Chief Business Officer Philipp Schindler, : “We're pleased with the strong growth in Google Services revenues in the first quarter. Year-on-year performance reflects elevated consumer online activity, broad-based strength in advertiser spend, and lapping of the initial impact of the pandemic on advertising revenues that began in March last year. [...] Over the last six months, people's shopping preferences have shifted constantly in response to changing conditions. It's not just online, it's not just offline, it's a mix. And that's our sweet spot with Search, Maps and YouTube.”
The trillion dollar club
Ruth Porat, CFO of Google and Alphabet, said: “Total revenues of $55.3 billion in the first quarter reflect elevated consumer activity online and broad based growth in advertiser revenue. We’re very pleased with the ongoing momentum in Google Cloud, with revenues of $4.0 billion in the quarter reflecting strength and opportunity in both GCP and Workspace.”
The Online Safety Bill: What is it and what does it mean?
New internet laws will be published today in the UK in the draft Online Safety Bill to protect children online and tackle some of the worst abuse on social media, including racist hate crimes.
The draft legislation, which was previously known as the Online Harms Bill, has been two years in the making. Some new additions to the bill include provisions to tackle online scams, such as romance fraud and fake investment opportunities.
What does it include?
The draft Bill includes changes to put an end to harmful practices and brings in a new era of accountability and protections for democratic debate, including:
New additions to strengthen people’s rights to express themselves freely online, while protecting journalism and democratic political debate in the UK.
Further provisions to tackle prolific online scams such as romance fraud, which have seen people manipulated into sending money to fake identities on dating apps.
Social media sites, websites, apps and other services hosting user-generated content or allowing people to talk to others online must remove and limit the spread of illegal and harmful content such as child sexual abuse, terrorist material and suicide content.
Ofcom will be given the power to fine companies failing in a new duty of care up to £18 million or ten per cent of annual global turnover, whichever is higher, and have the power to block access to sites.
A new criminal offence for senior managers has been included as a deferred power. This could be introduced at a later date if tech firms don’t step up their efforts to improve safety.
Digital Secretary Oliver Dowden said: “Today the UK shows global leadership with our groundbreaking laws to usher in a new age of accountability for tech and bring fairness and accountability to the online world.
“We will protect children on the internet, crack down on racist abuse on social media, and through new measures to safeguard our liberties, create a truly democratic digital age.
The draft Bill will be scrutinised by a joint committee of MPs before a final version is formally introduced to Parliament.