World News – United States – Google beats sales estimates with rebound in ad spend

Alphabet Inc returned to growth in the third quarter after a decline in the prior period, fueled by digital advertising which rebounded with the U.S. economy Shares rose around 6% as part extended trading in New York

Parent company Google said third-quarter revenue, minus the cost of distribution deals for its search engine, rose 15% to $ 38 billion Although this was slower than the pace of growth a year ago, this marked a turnaround from the decline in the previous quarter Analysts had estimated quarterly revenue of $ 35.4 billion YouTube, the part of Google’s advertising business fastest growing, grossed $ 5 billion, 32% more than last year

About 90% of Google’s revenue comes from advertising, much of which is linked to search results This activity came to a halt in the second quarter as the pandemic decimated its biggest customers, travel and travel companies. tourism But as lockdowns grew longer and people adjusted to spending more time at home, e-commerce exploded and people spent more time watching YouTube, helping the search giant to reboot. The US economy also rebounded, posting record third quarter growth

Evan as Alphabet stages a financial comeback, the company braces for its most serious regulatory challenge yet: an antitrust lawsuit by the US Department of Justice, which accuses the company of abuse of its dominant position in online search Google has issued a lengthy rebuttal to the lawsuit, which it describes as « deeply flawed » One of the government’s arguments targets Google’s deal with Apple Inc prioritizing its search engine in iPhone maker products Google pays between $ 8 billion and $ 12 billion for this privilege, and as a result, the DOJ said nearly half of Google’s search traffic in 2019 came from products Apple

Google has packed the top of the search results with advertising in recent years, increasing its ability to profit from user information searches

The second quarter was Google’s first without revenue growth in its two-decade history The drop was even more of a concern for investors as digital advertising rivals Facebook Inc continued to grow during the period. Alphabet’s CFO, Ruth Porat, assured investors at the time that things started to improve at the start of the third quarter Recently Snap Inc and Pinterest Inc, which also rely on advertising, have had good results

Cloud revenue increased 45% to $ 3-4 billion Analysts expected to see gains in this category due to increased demand for collaboration software with more people working from home Lower spending equity also helped boost Google’s margins and profits Google reported earnings per share of $ 1640, beating analysts’ estimates for $ 1142

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