Google is increasingly scoring points beyond advertising
Although advertising is still clearly Google's main source of income, the figures from parent company Alphabet show that the Group is becoming increasingly diversified.
It was the advertising business that made Google's cash registers ring last quarter. And experts such as analyst Colin Gillis from the broker BGC Partners also confirm that the parent company Alphabet is "the dominant force in digital advertising".
However, a closer look at the figures shows that the "Other Revenue" part of the business with the cloud offering, Pixel smartphone and Play online store now also makes a significant contribution. The hodgepodge reported a 49.4 percent jump in revenue to 3.1 billion dollars - that is more than Twitter's annual turnover.
The share of Alphabet's total revenue is now 13 percent, compared to ten percent in the previous year. Google is therefore doing a better job of diversifying its business than its competitor Facebook, says analyst James Wang from ARK Investment Management. "In our view, that's a pretty impressive achievement."
His colleague Ali Mogharabi from Morningstar expects the general merchandise division to grow by 38% to 14 billion dollars for 2017 as a whole. He is focusing on one division in particular: "We expect Google to make further progress in the cloud business."
Experts assume that the data cloud makes the biggest contribution to growth in the division. Google itself does not list the individual items of "Other Revenue".
It would be fitting that Google CEO Sundar Pichai explained in an analyst call on Thursday that the biggest growth in expenditure and personnel had been achieved in the cloud sector. However, the Californians are still far behind market leaders Amazon and Microsoft when it comes to computer services on the internet. Both are currently experiencing rapid growth in the cloud themselves: Amazon by 43 percent, Microsoft by as much as 93 percent. (SDA)
