Google’s parent company, Alphabet, shrugged off any concerns about a downturn in online advertising with another quarter of blockbuster earnings, lifted by continued strong demand for ads on YouTube and steady growth at its cloud computing business.
Alphabet said net profit in the third quarter rose 68 percent, to $18.94 billion, while revenue jumped 41 percent, to $65.12 billion. The results topped analysts’ estimates for $16.2 billion in profit and sales of $63.5 billion, according to data provided by FactSet.
The strong performance underscores the value of two of the internet’s prime destinations: Google’s search engine and YouTube’s video platform. While other social networks and advertising-dependent businesses have felt the sting of Apple’s policy change to require apps to ask users if they want to be tracked, Google’s advertising revenue remained strong. Ad revenue rose 43 percent in the quarter, to $53.13 billion.
In a research note last month, Brad Erickson, an analyst with RBC Capital Markets, said that Alphabet was facing greater regulatory pressure but that it was “almost an unfairly good business.” He noted that in conversations with advertisers, Google remains the “first dollar of spend for any digital strategy.”
The company also reported continued growth in its Google Cloud business. The unit, which competes with cloud computing services for businesses from Amazon and Microsoft, reported a 45 percent increase in revenue, to $4.99 billion, while narrowing its losses to $644 million from a year earlier.
