Google marches on with AI and online shopping boom

Google might be facing more investigations than seen on the True Crime Network, but parent Alphabet is marching on regardless, citing its long-term investment in artificial intelligence and the online shopping boom powering digital ad spend as major factors behind the group’s latest surge in revenues.

The technology giant posted revenue of $61.88bn (£44.59bn) in the three months to June 30, up 62% on the same period last year, driven by strong performance from Google search and YouTube, which account for the bulk of its revenue.

Google ad revenue soared almost 70% to $50.44bn (£36.35bn), with YouTube up 84% to $7bn (£5bn).

Google Cloud, which offers marketing analytics and data management solutions using machine learning and AI technology, earned $4.63bn (£3.34bn) in the period – up from £3.01bn last year.

This helped significantly improve Google Cloud’s operating losses to $591m, from last year’s loss of $1.43bn.

Alphabet and Google chief executive Sundar Pichai said: “In Q2, there was a rising tide of online activity in many parts of the world, and we’re proud that our services helped so many consumers and businesses. Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone’s digital experience.”

According to eMarketer, worldwide, Google is on track to generate $130.15bn in net digital ad revenue in 2021, an increase of 25.3%. That gives it a 28.6% share of the worldwide digital ad market. Facebook is second with a 23.7% share.

It forecasts that, in 2021, Google will remain the dominant player in worldwide search ad spending, with a 57.6% share and that its search revenue will be $105.47bn this year, surpassing $100bn for the first time.

Furthermore, eMarketer reckons Google’s worldwide display business will grow to $24.67bn, giving it a 9.8% share of global display spending, while it will capture 27.6% of the worldwide mobile ad market, with $94.17bn in net revenue.

eMarketer principal analyst at Insider Intelligence Nicole Perrin said: “Just like when Alphabet reported last quarter’s results, its Q2 2021 results also outperformed our expectations across all three lines of Google’s ad business: search, Google Network, and YouTube.

“YouTube was the fastest-growing segment during the quarter and points to the continued strength of video advertising for both direct response and brand goals.

“Growth in Google’s Network was the slowest among the three segments, but represented the strongest overperformance compared to our expectations, suggesting the overall programmatic display market continues to grow strongly.”