- YouTube generated $15 Billion through ad revenues, contributing to Google’s overall $134 Billion ad revenue while Alphabet 2019 revenues reached nearly $162 billion.
YouTube generated nearly $5 billion in ad revenue over the last three months, Google revealed today as part of the fourth-quarter earnings report from parent company Alphabet. This is the first report under newly established Alphabet CEO Sundar Pichai, who took over as the entire company’s chief executive late last year after co-founders Larry Page and Sergey Brin stepped back from their daily duties and moved Pichai, former Google CEO, to the top spot.
The news marks the first time in 15 years since Google bought the website for $1.65 billion in 2006, that the company has announced how much money YouTube-hosted advertisements add to the search giant’s bottom line.
Google says that on an annual basis, last year, YouTube generated $15 billion and contributed approximately 10 percent to all Google sales. Those estimates make the ad business of YouTube about one-fifth the size of Twitter, and more than six times the size of all Amazon-owned Twitch.
Separately, Google says YouTube has over 20 million subscribers across its Premium (ad-free YouTube) and Music Premium channels, as well as over 2 million subscribers to its paid television service. Alphabet says revenue from those products is bundled into the “other” category, which last quarter made up $5.3 billion and also includes hardware such as Pixel phone and Google Home speakers. It makes the specific performance of any product bundled under that label difficult to calculate.
Overall, in the quarter ended December 31, 2019, Alphabet made $46 billion in revenue, a 17 percent leap over 2018. Nearly $10.7bn of that was profit, the firm says. Google’s search business remains Alphabet’s sprawling empire’s big money-maker, earning $27.2 billion for the quarter. But Google is also revealing the financial performance of its cloud computing division alongside YouTube ad revenue. Google Cloud generated revenues of $2.6 billion for the quarter, the report reveals.
This means which Google beat Wall Street estimates dramatically on income but missed sales. That may be one reason why Google first discloses income from YouTube and Google Cloud.
It is important for Google to remind onlookers to reassure investors that its company is not solely dependent on its search engine and that it has fast-growing and separate businesses such as YouTube and its cloud computing division to pick up the slack.
In 2019, the company says, Google Search created an eye-popping $98.1 billion, but that’s just an improvement of 15 percent over 2018. On the other hand, YouTube rose from $11.2 billion in 2018 to last year’s $15.15 billion, a 36.5 percent leap. That said, for Alphabet, a sales miss of this size means investors were not happy with it, and Alphabet stock is now down more than 4 percent in after-hours trading.