Alphabet can once again report a significant increase in its profit this year. Of course, the tech company has its in-house search engine giant Google to thank for this. This year, Google has once again managed to generate gigantic sums of advertising money thanks to a wealth of valuable user data.
Successful year for Silicon Valley
As we reported earlier, Tesla and Facebook, two companies originating in the notorious Silicon Valley, have already posted rising revenues and profits this week. With Alphabet, another tech giant from California’s El Dorado for IT visionaries can now spread positive news. The parent company of search engine giant Google was able to record a whopping 65 billion US dollars in sales in the third quarter of 2021 alone. Compared to the same period last year, this represents a 41 percent increase in revenue. This increase is really impressive, as Alphabet has not been able to record any major revenue increases in the last ten years.
Even more pleasing for the group, however, should be the profit generated. This is up by a whopping 88 percent and stands at 21 billion US dollars. However, in view of the slight increase in the tax burden, the profit increase will fall to 68 percent. Alphabet can therefore report a “net profit” of 19 billion US dollars. Friends of mathematics can make exciting and really impressive calculations in this regard. If you take a look at Alphabet’s hourly profit, it is an impressive 8.6 million US dollars. Given the encouraging figures, it is a little surprising that Alphabet’s shares fell in value after the increases were announced.
KI is target number 1
Alphabet’s CEO Sundar Pichai made it clear once again when announcing the numbers that developing and perfecting artificial intelligence (AI) remains a priority for him. He himself thinks that this global trend is also reflected in the positive figures. Mankind believes in the benefits of AI and therefore also in Alphabet. Pichai himself already hinted five years ago that a new corporate age had begun with AI. Not without reason did he change the objective away from “mobile first” to “AI first” at that time. He himself thinks that smartphones will sooner or later be just one of many different ways to communicate with AI. The release of its Google Pixel 6 alone makes it clear that the company itself doesn’t want to give up on the smartphone market quite yet.
Google is the hobbyhorse
If you take a look at Alphabet’s various sources of income, it quickly becomes clear that Google is the number 1 guarantor of money here. Apart from the search engine giant itself, there is hardly any revenue worth mentioning. Alphabet was able to generate 62 million US dollars from insurances and 182 million US dollars from “other bets”, but these are really peanuts compared to the profits that the group was able to record with Google. The Google search engine alone generated around 38 billion US dollars. In addition to the search engine itself, other services such as YouTube and apps also shone with increases of around 40 percent. Above all, it is advertising revenue that brings in the rich profits for the company. If you add up the sales of all the services and companies belonging to Google, you get a turnover of 65 billion US dollars.