SAN FRANCISCO, United States —
Google's parent firm
Alphabet announced quarterly profits Tuesday that beat expectations and nearly
doubled in 2021 — after a booming holiday season for the online ads giant
facing anti-trust regulation scrutiny.
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The tech giant had net income of $20.6 billion on revenue
that grew 32 percent to $75 billion in the final quarter of 2021, ending the
year with a total of $76 billion in profit.
That was nearly double the $40 billion annual profit
reported for 2020, as the pandemic had already accelerated a shift to online
shopping, working and learning that also benefited fellow giants like
Amazon and Facebook.
Alphabet CEO
Sundar Pichai cited "strong growth in our
advertising business ... a quarterly sales record for our Pixel phones despite
supply constraints, and our cloud business continuing to grow strongly"
for the success.
In all, Google earned more than $61 billion in advertising
revenue, mostly from online search and its video platform, while its cloud
business grew by 45 percent to $5.5 billion in revenue.
Google's dominance online has powered it to new heights
during the pandemic period, but has also left it in the sights of regulators
around the world.
Pichai said during an earnings call that Alphabet is open to
"sensible" regulation by Congress but is "genuinely concerned
that they could break a wide range of popular services we offer to our
users."
Some regulatory proposals could have unintended consequences
such as weakening privacy and safety, or putting US companies at a
disadvantage, according to Pichai.
Alphabet's strong earnings come after Apple, another
pandemic-era winner, reported record revenue last week as markets were jittery
about tech's future as well as geopolitical risks like the
Ukraine crisis.
However, regulators' scrutiny around the world is stacking
up as one of the most significant risks for the Silicon Valley giant.
"Google has the biggest uphill battle in terms of
antitrust issues among all of the Big Tech companies," Third Bridge
analyst Scott Kessler wrote.
"Despite Apple's bigger size and Meta/Facebook's bad
publicity, Google is seen most at risk in terms of US antitrust law," he
added.
Retail ads help push growth
Just last week, a group of top US justice officials accused
Google in lawsuits of tracking and profiting from users' location data, despite
leading consumers to think they could protect their privacy on the tech giant's
services.
These suits are the latest legal threats against Google and
other US Big Tech giants, which have long faced probes and court cases but a
lack of new national laws that would regulate their businesses.
The courts and legislatures are not moving fast. Two weeks
ago, for example, Google appealed a European court ruling that upheld a 2.4
billion-euro fine imposed by Brussels in 2017 for anti-competitive practices in
the price comparison market.
Alphabet's expectations-beating results offered positive
signals even as diminishing growth shadowed firms like lockdown lifestyle champ
Netflix.
Netflix lost tens of billions of dollars in market
capitalization last month — but has rebounded — after projecting growth of just
2.5 million subscribers this quarter.
Fortunes were quite different for Google, with Alphabet
saying its board had approved a 20-to-1 stock split that would make shares more
affordable to small investors.
The firm predicts that its growth will continue in 2022,
with digital advertising expected to bring in more than $171 billion to Google
this year, or 30 percent of the global pie, just ahead of Facebook.
"In the fourth quarter, retail was again by far the
largest contributor to year-on-year growth of our ads business,"
Alphabet CBO Philipp Schindler told analysts.
"Finance, entertainment and travel were also strong
contributors," he added.
The stock was up nearly nine percent in after-market trades
Tuesday at 10:40pm GMT to $2,990.
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