COVID-19 hits Google! Parent Alphabet posts first revenue decline in company history

New Delhi, July 31: Google's parent company Alphabet posted the first revenue decline in its history during the three months ended in June, a sign of just how much the global pandemic and economic downturn is straining its core advertising business. The internet giant on Thursday reported nearly $38.3 billion in revenue for the second quarter, down 2% from the year prior.

 

 

Alphabet (GOOGL) posted net income just shy of $7 billion, which also beat analysts' projections. Shares were essentially flat in after-hours trading following the release. "We continue to navigate through a difficult global economic environment," Alphabet CFO Ruth Porat said in a statement with the earnings report.

 

Many companies have pulled back on ad spending as they grapple with the economic crisis brought on by the pandemic. Advertising revenue across Google's properties declined 8% during the quarter, to $29.9 billion — dragged down by a nearly 10% drop in Google Search advertising revenue. YouTube ad sales, however, grew nearly 6%.

 

Revenue from Google Cloud, a key growth area for the company that competes with Amazon Web Services and Microsoft Azure, grew 43% from a year earlier to more than $3 billion. The company's 'Other Bets' segment, which includes efforts such as Sidewalk Labs and its self-driving car unit Waymo, once again weighed on profits during the quarter. Other bets posted a $1.1 billion operating loss during the quarter.

 

(With inputs from CNN)