In a surprising turn of events, Google’s cloud business finally turned a profit after three years of losses. The news was part of Alphabet’s third-quarter earnings report, which also showed YouTube ad revenue falling for the third consecutive quarter.
According to the report, Google Cloud generated $3.4 billion in revenue in the third quarter, up from $2.4 billion in the same period last year. It’s a significant milestone for the cloud division, which is struggling to catch up with its competitors Amazon Web Services and Microsoft Azure in the highly competitive cloud computing industry.
Google’s cloud business has invested heavily in expanding its data centers and hiring vendors to increase its market share. This strategy seems to be paying off, as more and more companies are turning to Google Cloud to solve their cloud computing problems.
YouTube’s ad revenue, on the other hand, continues to decline for the third consecutive quarter. According to the report, advertising revenue fell to $5.04 billion in the third quarter, down from $5.81 billion in the same period last year. The decline in advertising revenue is attributed to the ongoing pandemic, as many companies have cut back on advertising spending.
Despite the decline in YouTube ad revenue, Alphabet’s total revenue rose to $65.1 billion in the third quarter, up from $46.2 billion in the same period last year. The growth was driven by strong performance in Google Cloud and Google’s search and advertising business.
The report also reported that Alphabet’s net income for the quarter was $18.5 billion, up from $11.2 billion in the same period last year. This is a clear indication that the company’s diversification strategy is paying off as it continues to invest in new businesses and technologies.
Overall, the third-quarter earnings report shows that Google’s cloud business is finally starting to gain traction, while YouTube ad revenue has suffered because of the pandemic. Still, Alphabet’s overall performance remains strong thanks to its diverse portfolio of businesses.
It will be interesting to see how Google’s cloud business continues to perform in the coming months and whether YouTube ad revenue will recover when the pandemic subsides. Nonetheless, Alphabet’s third-quarter earnings report shows that the company is well positioned for long-term growth and success.