Google’s ad revenues have recovered after plummeting in March during the coronavirus pandemic, Alphabet ‘s parent said Thursday, easing anxiety about its first quarterly sales drop in its 16 years as a public business. Alphabet shares had barely moved to $1,552 above their pre-pandemic peak, having posted a 2 per cent drop in sales in the second quarter, less than analysts’ forecast of a 4 per cent fall.
Alphabet, whose ad sales account for about 78% of its income, has suffered through previous economic slowdowns, as marketing is often the first budget item to be slashed. But on Thursday, Google and its online advertising rivals Facebook and Amazon reported better pandemic results than in past recessions. Alphabet reported a $28 billion increase to its equity buy-back plan. It said that it will still employ a broad class of recent students, even as it reduces spending on real estate and other activities.
Alphabet ‘s income was almost $7 billion, or $10.13 per share, above the average analyst estimate of $5.6 billion, or $8.29 per share, for the quarter. Approximately 66 per cent of its revenue came from Google search and YouTube ads, 12 per cent from advertisements sold on partner assets online, 8 per cent from its cloud service, and 14 per cent from its smartphone app store, and around a dozen other smaller businesses.