Good business at Microsoft: Google’s advertising revenue is bubbling more slowly

Good deals at Microsoft
Google’s advertising revenue is bubbling up more slowly

With Alphabet and Microsoft, two tech heavyweights presented their quarterly figures after the US stock market closed. Only Microsoft can convince, mainly thanks to a substantial plus in the cloud business. The Google parent, on the other hand, felt the reluctance of advertisers and failed to meet analyst expectations.

While Microsoft continued to benefit from the trend towards mobile working at the start of the year, Google’s parent company Alphabet felt the reluctance of advertisers in the middle of the global economic slowdown. In the first quarter, revenues climbed by 23 percent to around 68 billion dollars, as the world’s largest search engine provider announced on Tuesday after the US stock market closed. Profits, on the other hand, even fell by eight percent to $16.4 billion. Analysts had set the bar higher for both sales and profits. The stock fell more than four percent in after-hours trading, while the Microsoft paper rose slightly.

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During the pandemic, Google had benefited from the online boom and the associated bubbling advertising revenue. No other company in the world sells as many ads on the internet as Google. However, competition from companies like Amazon and TikTok is growing. In addition, many advertisers currently prefer to keep their money together in order to be able to react more flexibly to concerns about inflation, delivery problems and the Ukraine war. Google was also having a harder time in the cloud sector than it was a year ago.

Cloud boom continues

The direct competitor Microsoft, on the other hand, pleased investors with an increase in the cloud business – including the Azure offer – of 26 percent. Otherwise it went well. Microsoft’s sales increased by 18 percent to almost 49.4 billion dollars in the past quarter at the end of March, as announced by the world’s largest software company from the USA. That’s more than analysts had expected. Operating profit rose 19 percent to $20.4 billion.

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Like Amazon and Google, Microsoft is benefiting from the fact that more and more employees, schoolchildren and students have been moving flexibly between the home office and the office since the Corona crisis. For this to work, both companies and private individuals need storage space and applications in the cloud that everyone can access from anywhere. The products and services often come from Microsoft – the home of Windows and Teams.

Microsoft is no longer only active in the software sector. The US group currently wants to take over the call-of-duty developer Activision Blizzard for 69 billion dollars and is thus also betting on the metaverse that is currently being created – a virtual world accessible via various devices and platforms, which is intended to merge online and offline. Most recently, Microsoft had a lucky hand – as with the takeovers of LinkedIn or Skype.

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