Alphabet’s profit rose 36% to $20.64 billion in the fourth quarter

There’s so much uncertainty surrounding Google’s parent company Alphabet these days: a global pandemic, inflation fears gripping the US economy, restless employees defying management, and regulators and politicians seemingly determined to put on their weight.

But one thing hasn’t changed. Alphabet continues to make money. Many.

On Tuesday, Alphabet reported a 36% increase in profit to $20.64 billion in the last three months of 2021 on revenue of $75.32 billion, up 32% from last year. ‘last year. Earnings topped analysts’ estimates of $19 billion in profit and $72.3 billion in revenue, according to data compiled by FactSet.

Alphabet shares jumped 8% in the secondary market from a closing price of $2,752.88. The company also announced plans for a 20-to-1 stock split – a move that is generally applauded by the market as it makes every share more affordable.

Five days after Apple posted record quarterly earnings, Google’s blockbuster earnings were further proof that the tech giants are continuing to make massive profits in the face of supply chain constraints, concerns over the inflation and a prolonged pandemic.

Google’s strong results served as a reminder of the underlying power of its business and how, regardless of the circumstances surrounding it, the business will continue to thrive as long as people are active on the internet.

Google search remains the preferred on-ramp to the Internet. YouTube is an essential online destination for entertainment, information and music. Although it lags Amazon and Microsoft, Google is well positioned to capitalize on the seismic shift of companies outsourcing technology infrastructure to the cloud.

With a solid foundation, Google has made slight adjustments to fortify its strongholds.

The company has changed the way it lets retailers list products in a bid to entice more users to start on Google or YouTube when shopping online. In a recent survey, Morgan Stanley found that the percentage of people starting searches on Google and YouTube has increased since May, while the percentage of Amazon Prime users starting searches on Amazon has fallen.

While Facebook and other internet companies have felt the sting of the tighter privacy controls Apple has put in place on its devices, Google’s advertising business, which includes ads on YouTube, has continued to grow, increasing by 32% in the quarter, to $61.2 billion.

YouTube has introduced short videos – under 60 seconds – to compete with TikTok and appeal to younger audiences. Google said it has more than tripled the number of sellers in its cloud unit since 2019 as part of a push to expand into new industries and forge partnerships. Google Cloud’s revenue rose 45% to $5.5 billion, while the unit’s losses narrowed to $890 million from a loss of $1.24 billion a year earlier .

Google said it hired 6,500 employees during the quarter, bringing its total workforce to 156,500. Ruth Porat, Alphabet’s chief financial officer, said she expects the “strong pace of hiring” to continue in 2022.

She also noted that she expects a “significant increase” in capital spending this year, including the cost of building or renovating office buildings.

In a conference call, Sundar Pichai, chief executive of Alphabet, answered a question about possible antitrust legislation being discussed in Congress. Mr Pichai said he feared the proposals would “break” a wide range of Google services and harm the company’s ability to protect users.

He also echoed an argument made by Meta, Facebook’s parent company, that proposals targeting Big Tech “can hurt American competitiveness” because they could put American companies at a disadvantage.

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