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Google's sales in detail: That's how much Google earns with YouTube, Cloud & Hardware - advertising remains a cash cow

 

To start the week on Monday, Alphabet will be the last major tech company to have the Quarterly figures announced and you can now look a little deeper into the maps than before. With further breakdowns of the revenue sources, it is now finally known how much Google earns with YouTube and how much money the cloud business is flushing into Google's coffers. It shows that the company simply cannot get away from advertising.

Like every listed company, Google and Alphabet also submit the most important key figures for the past quarter every three months. On Monday, Alphabet announced that it had a turnover of 46 billion dollars in the fourth quarter of 2019 - which, unsurprisingly, was largely generated by Google, of course. And a large part of that with advertisements, which have always played the greatest role.

For many years now, investors and observers have been demanding that Google become less dependent on the advertising business and find new sources of income. Although business has been booming for over two decades and can show great growth again and again, advertising is more than anything else dependent on the economic environment. The next big crisis is bound to come and then Google sales would plummet much faster than new sources of income would be found. At least that is what investors are worried about.

Google and Alphabet have now broken down the sales very precisely and for the first time also gives an insight into how much money one earns with the potent subsidiaries YouTube and Google Cloud - which was previously a small company secret. But the lion's share of YouTube sales also come from advertising, so that they have to be added to Google's advertising business despite a certain independence from Google. You can find the figures for YouTube and Google Cloud in detail in this article.

In particular, the cloud business is actually supposed to significantly reduce the dependency on the advertising business, but so far this has not been successful and the cloud sales are ridiculously low compared to the remaining sales of the group and also the competition from Amazon to Microsoft. It turns out that Google simply can't get a foothold outside of the advertising world.

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Progress can be seen
In the past three years, as the figures finally show, we have made some progress - but much too slowly for the taste of many observers. In 2017, 86.4 percent of sales came from the advertising business, in 2018 it was 85.5 percent and in 2019 it was 83.9 percent. It is developing in the right direction, but at a much too slow pace given the numerous products outside of the advertising business.

The revenues outside of advertising include the Google Cloud, the numerous subscription services, the revenues in the Play Store, the storage space purchased by the users, but of course also the hardware sales and the revenues of the remaining Alphabet companies. A huge range that still cannot shake Google's advertising throne. It is absolutely not foreseeable whether this will change significantly in the next few years.

Hardware is likely to remain a secondary business for Google for a long time to come, despite numerous well-known and in some cases also successful products (Pixel smartphones, Nest Home, Chromecast, ...). The subscription services and the Play Store cannot continue to grow indefinitely either and the long-standing hope of the cloud is only slowly gaining momentum, although it is not foreseeable whether one day the turbo will be ignited.

» Google's quarterly figures in detail

» Google mentions numbers for the first time: That's how much Google earns with YouTube and Google Cloud & Alphabet losses


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label alphabet, financial, google cloud, youtube