Google bounces back from search advertising slump with sales jump
Google parent Alphabet has bounced back from a sharp advertising decline earlier this year, beating Wall street estimates to bank $11.2bn (£8.6bn) in profit for the third quarter of 2020.
Shares rose by more than 8pc in after hours trading - adding $4.8bn and $4.6bn to the respective paper wealth of founders Larry Page and Sergey Brin - as third-quarter profits beat Wall Street estimates, rising by 59pc to $11.2bn.
Alphabet, which makes most of its money from advertising, saw revenue decline for the first time in its history earlier this year as advertising budgets shrunk over economic uncertainty.
But recent recoveries boosted sales at its search engine and YouTube video site. Alphabet’s total sales rose by 14pc to $46bn, with search advertising, which is under pressure after the US government last week charged Google with monopoly abuse, accounted for around half of revenues at $26.3bn.
Ruth Porat, the company’s finance chief, added that Google’s Play Store for Android smartphone apps had contributed to stronger sales as users turned to digital entertainment.
Alphabet’s Other Bets division, which accounts for its driverless car unit Waymo, its life extension lab Calico and other high risk ventures reported a loss of $1.1bn, up slightly from $941m the year before.
Sundar Pichai, Google chief executive said that the strong quarter was “consistent with the broader online environment” adding that its investments in artificial intelligence “deliver services that people turn to for help in moments big or small”.
