Yahoo Finance Google and Microsoft reveal record profits
Google’s parent company Alphabet has powered to record profits as a post-pandemic resurgence in advertising demand brought in billions more dollars for the search giant.
Microsoft also revealed record figures, and predicted that rising inflation fears around the world would force more employers to spend on technology and automation.
Alphabet, which owns Google and a host of loss-making side projects from driverless cars to delivery drones, revealed that revenues in the third quarter of the year had climbed by 41pc to $65bn (£47bn), with growing sales both from its profit-spinning search engine and the YouTube video site.
Quarterly profits rose 68pc, from $11.2bn to $18.9bn, despite the company embarking on a hiring spree that means it now employs more than 150,000 people.
Alphabet suffered its first ever decline in revenue in the early months of the pandemic last year as advertising for Google’s key areas such as travel and jobs ground to a halt, but the company has rebounded strongly from reopening.
Before last night, shares had climbed by 62pc this year, the most of the major tech companies. They were flat in after-hours trading following the results.
The record figures come despite the company facing an unprecedented regulatory onslaught in its home market. The US government is suing Google over allegedly unfair tactics it uses to maintain its dominance of web search, and US states have sued the company over its advertising business and its Android app store.
Microsoft posted a 22pc increase in revenues, to $45.3bn, and said profits had climbed by 48pc, to $20.5bn.
The company’s fastest growing division was its cloud computing unit, Azure, which thousands of companies rely on for online hosting and data processing.
Satya Nadella, its chief executive, predicted that demand for the company’s products would pick up as businesses face rising inflationary pressures such as wage increases.
“Digital technology is a deflationary force in an inflationary economy,” Mr Nadella said. “Businesses – small and large – can improve productivity and the affordability of their products and services by building tech intensity.”
The microblogging service Twitter, which also reported quarterly figures last night, posted an increase in revenue and shares rose as the company said the cost of Apple’s recent privacy changes to the iPhone had been less severe than feared.
Both Snapchat and Facebook have said in recent days that the change had been costly but Twitter said the impact had been “lower than expected”.
However, Twitter fell to a $743m loss as it swallowed the cost of a recent $810m lawsuit from shareholders over the company’s New York flotation in 2014.
