Google Cloud posted an operating loss of $ 1.2 billion in the last quarter of 2020, 4% worse than a year earlier, the technology giant reported on Tuesday. The unit lost $ 5.6 billion for the full year, an increase of nearly 21%.
However, the company’s overall business is doing just fine, with a net profit of $ 15.2 billion – 43% higher than in the same period last year – with revenue of almost $ 57 billion, an increase of 23% and higher than analysts had estimated.
Google (GOOGL) shares jumped more than 6% after hours.
While Google seeks money from its core advertising business, the company has been working for years to diversify its revenue by committing to hardware, cloud computing and various ambitious lunar project projects. The cloud, which was apparently a big profit driver for rival Amazon, was one of its most promising efforts.
Google’s cloud business sees sales grow rapidly, even as losses increase. Revenue from this unit rose $ 13 billion higher last year, compared to nearly $ 9 billion in the previous year.
Earlier this week, the company announced a six-year strategic partnership with Ford, making Google the manufacturer’s preferred cloud data storage provider.
“We have, of course, invested aggressively given the significant market opportunity we see,” Google chief financial officer Ruth Porat said on Tuesday in an earnings call, pointing out that . term commitment agreements. ”
The operating loss of the cloud industry “reflects that we built our organization meaningfully before revenue,” she added.
US technology giants further strengthened their dominance during the coronavirus pandemic, even though economies around the world experienced major setbacks – Facebook’s $ 11.2 billion profit was more than 50% higher last quarter than in the previous year; Microsoft (MSFT) achieve record income; and Amazon (AMZN) exceeds analysts’ profit expectations by more than $ 1 billion.
But many of the companies are under intense pressure from regulators that are likely to increase further in 2021. Google, like Facebook (FB), faces a massive antitrust lawsuit, as well as questions about its role – especially through the video platform YouTube – in spreading misinformation about the US presidential election last year.
Google is also seen under pressure from within, with hundreds of employees being the first union of the company to be formed in early January.
And despite the ever-growing dominance, especially in areas such as online searches and advertising, the company has withdrawn from several notable projects in recent weeks.
Google on Monday halted video game development efforts that were part of its Stadia gaming platform, days after parent company Alphabet said it was launching an initiative called Loon, which uses giant balloons to send internet to people in remote areas around to radiate will end the world.
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