Google raked in $76 billion in annual net profit in 2021, nearly double 2020, after a particularly successful holiday season for the online advertising giant, accused of illegal monopoly by various authorities. In the fourth quarter alone, the American group once again greatly exceeded market expectations, with 75.33 billion dollars in turnover, of which it generated 20.64 billion in net profits, according to its press release. published tuesday 1er February.
“Our quarterly revenue, up 32% year-on-year, reflects strong ad spend across all formats and strong online consumer presence, as well as substantial revenue growth for Google Cloud”the remote computing arm of the company, said Ruth Porat, Alphabet’s chief financial officer.
The world leader in online advertising faltered slightly at the start of the pandemic, when some advertisers, such as tour operators, put their campaigns and promotions on hold. But the series of confinements and the digital habits adopted for almost two years have finally greatly benefited Google as well as other technology companies, from Apple to Meta (Facebook) via Amazon and Microsoft.
Telework and online commerce, in particular, allow the search engine and YouTube to attract more and more brands concerned with tracking the consumer. In all, Google earned more than $61 billion in advertising revenue, primarily from online search and its video platform. Its cloud branch grew by 45%, to 5.5 billion in turnover.
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And the boss of the group, Sundar Pichai, welcomed “record quarterly sales despite supply chain challenges” for Pixel, its smartphone brand. Alphabet released the Pixel 6 in the fall, a new line of devices with a Google-designed processor and plenty of AI features.
The company also said its board had approved a 20-for-one stock split to make it more affordable for retail investors. The title took more than 7% during electronic trading after the closing of the New York Stock Exchange, at more than 2,900 dollars.
“For the first three quarters of 2021, Google delivered better-than-expected advertising results. (…) This pulled the whole market up and led us to revise our forecasts upwards”, pointed out Paul Verna, analyst at eMarketer. The firm predicts that this growth will continue in 2022: digital advertising should bring more than 171 billion dollars to Google this year, or 30% of the global cake, just ahead of Facebook (23.7% market share).
Cascading legal proceedings
This leading duo and their advertising targeting methods have been the subject of various investigations, complaints and fines for years. In Europe and the United States, the pace of lawsuits has accelerated, without slowing down the growth of Silicon Valley. The most senior leaders of Google and Meta (Facebook’s parent company), for example, are accused by American states of having entered into an illegal agreement in 2018 to consolidate their domination of the online advertising market.
In Congress, in Washington, elected officials are working on laws to end the monopolies of computer giants. Courts and parliaments are progressing at a moderate pace. Two weeks ago, Google appealed against a European court decision confirming a fine of 2.4 billion euros imposed by Brussels in 2017 for anti-competitive practices in the price comparison market.
But according to Third Bridge analyst Scott Kessler, “In the antitrust field, Alphabet is going to have to fight the most difficult battle of Big Tech. Despite Apple’s size and Meta/Facebook’s poor reputation, Google is perceived as the most struggling company in this field in the United States..