Google makes loads of money, but cloud is real story
Latest quarter brought in $26.01 billion
Googlers are still swimming in cash as the latest quarter brought in $26.01 billion, and not even a $2.74 billion fine from the European Commission could dampen the mood at this party, reports Telecoms.com (Banking Technology‘s sister publication).
The uplift in revenue, accounting for a 21% year-on-year boost, should not really come as a huge surprise to many, however the cloud business has been quietly going about its business, making some serious cash in the process.
The ‘other revenues’ segment in the results, which contains the cloud business unit as well as the Google Play app store, grew a massive 42% to $3.1 billion. Although this only makes up 12% of total revenues currently, this simply shows the gargantuan size of the Google advertising business. Quarterly revenues of $3.1 billion would make the cloud unit a business heavyweight in its own right.
And this isn’t necessarily talking about the artificial intelligence (AI) play directly either. The Infrastructure-as-a-Service (IaaS) product offering is proving to be one of the strongest around, but the Deepmind AI proposition would be a clear market leader in some people’s eyes.
“Google continues to lead the shift to AI driven computing,” says CEO Sundar Pichai. “We are working to make this incredible technology available to everyone around the world. It’s our focus on infusing our products and platforms with power of machine learning and AI that’s driving our success.”
One area which seems to get forgotten within the Google armoury (amazingly so) is YouTube. It’s one of the most popular websites/apps on the planet, but seems to be subdued to the shadows when you look at the monumental numbers which are being thrown around the Google financial calls. That said, there is some serious growth going on there as well.
The smart home, and the wider internet of things (IoT) segment, is a massive market for internet companies like Google who see virtual assistants as a new revenue stream.
But the competition is fierce. Amazon’s Alexa and Apple’s Siri are the two competitors which look like they could cause the greatest amount of discomfort, but Microsoft’s Cortana could pose a threat as well.
But the key advantage here is the penetration which Google has already achieved. Google Smart Home devices are selling well, bringing the Google Assistant directly into the living room, but then its own Pixel handset could make a few dents as well. Android as an operating system is by far away the market leader, as is the search engine, and YouTube as a video platform.
These are all routes to the consumer, ways to collect data or touch points for the virtual assistant. The wider this penetration goes, the more opportunities Google has to bulk out the advertising business into unexplored areas.
Google is already one of the most influential businesses on the planet, but this voice could become louder and louder as it strangles the digital economy further.
