Coronavirus slows Alphabet growth, drives Google users
COVID-19 chills advertisers even as social distancing forces more online
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Google, YouTube and cloud-based services drove parent company Alphabet to a 13 percent revenue gain, the slowest growth the company has seen in more than four years as the coronavirus pandemic spread around the world.
The tech giant, based in Mountain View, Calif., reported $41.2 billion in revenue, or $33.6 billion after ad commissions, for its quarter that ended March 31, which is slightly better than analysts’ expectations. The company posted $6.84 billion in profit, earning $9.87 per share.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOG | ALPHABET INC. | 155.72 | -1.74 | -1.11% |
| GOOGL | ALPHABET INC. | 154.09 | -1.92 | -1.23% |
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“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time,” CEO Sundar Pichai said in the announcement to investors. “People are relying on Google’s services more than ever, and we’ve marshaled our resources and product development in this urgent moment.”
Sundar Pichai (File photo)
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Google’s advertising business was strong in January and February, but it had “sudden” slowdowns in March that followed coronavirus shutdowns, Pichai said. The company had to delay the start of some ad campaigns, and it has offered hundreds of millions of dollars’ worth of ad credits to health agencies and waived fees for some business customers.
However, many of Alphabet’s businesses also had large increases in users as self-isolating policies forced many workers and students to stay home. The peak of the coronavirus-related search was four times greater than the peak of Super Bowl-related search, according to Pichai. YouTube watch time was up, especially for live streams. And there were more than 100 million students and educators using Google Classroom, double the number at the start of March.
Revolving entrance doors on the exterior of Google's London HQ. (iStock)
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Pichai said Alphabet would slow hiring for the rest of 2020 and “recalibrate” its investing focus, but the company is expecting that there will be more work, education, medicine, shopping and entertainment happening online even after the pandemic is over.