LOS ANGELES: Google’s parent firm Alphabet announced quarterly profits that beat expectations and nearly doubled in 2021 after a booming holiday season for the online ads giant facing anti-trust regulation scrutiny.
The tech giant had net income of $20.6 billion on revenue that grew 32 percent to $75 billion in the final quarter of 2021, ending the year with a total of $76 billion in profit. That was nearly double the $40 billion annual profit reported for 2020, as the pandemic had already accelerated a shift to online shopping, working and learning that also benefited fellow giants like Amazon and Facebook.
Alphabet CEO Sundar Pichai cited “strong growth in our advertising business… a quarterly sales record for our Pixel phones despite supply constraints, and our cloud business continuing to grow strongly” for the success.
Google earned more than $61 billion in advertising revenue, mostly from online search and its video platform, while its cloud business grew by 45 percent to $5.5 billion in revenue. Google’s dominance online has powered it to new heights during the pandemic period, but has also left it in the sights of regulators around the world.
Pichai said during an earnings call that Alphabet is open to “sensible” regulation by Congress but is “genuinely concerned that they could break a wide range of popular services we offer to our users.” Some regulatory proposals could have unintended consequences such as weakening privacy and safety, or putting US companies at a disadvantage, according to Pichai.
Alphabet’s strong earnings come after Apple, another pandemic-era winner, reported record revenue last week as markets were jittery about tech’s future as well as geopolitical risks like the Ukraine crisis.
Just last week, a group of top US justice officials accused Google in lawsuits of tracking and profiting from users’ location data, despite leading consumers to think they could protect their privacy on the tech giant’s services.
These suits are the latest legal threats against Google and other US Big Tech giants, which have long faced probes and court cases but a lack of new national laws that would regulate their businesses.
The courts and legislatures are not moving fast. Two weeks ago, Google appealed a European court ruling that upheld a 2.4 billion-euro fine imposed by Brussels in 2017 for anti-competitive practices in the price comparison market.
Alphabet said its board had approved a 20-to-1 stock split that would make shares more affordable to small investors. The firm predicts that its growth will continue in 2022, with digital advertising expected to bring in more than $171 billion to Google this year, or 30 percent of the global share, just ahead of Facebook.
