Alphabet finally reveals how much YouTube earns in ad revenue

4 Feb 2020714 Views

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Alphabet published its earnings report for Q4 2019, revealing how much YouTube and its cloud services made in advertising revenue.

While Alphabet’s latest earnings report did little to please shareholders, it was noticeable for being the first to declare advertising revenue for some of the company’s biggest products and services. However, the Google parent company has not disclosed what its profits are for these services.

According to CNBC, YouTube ads generated $15.15bn in revenue in 2019, with $4.72bn of that made in Q4 alone. By comparison, YouTube ads generated a total of $11.16bn in 2018. However, it is worth noting that this revenue does not include YouTube’s other revenue streams such as subscriptions to its YouTube TV service, which now has more than 2m subscribers.

Alphabet and Google CFO Ruth Porat said non-advertising revenue totalled $3bn for YouTube in Q4 2019, adding that the majority of this was transferred to content creators. Neither Porat or Google disclosed what percentage of revenue goes to its creators.

Meanwhile, Alphabet’s cloud side of the business generated $8.92bn in 2019, of which $2.61bn was made in Q4. In 2018, cloud generated $5.84bn for Alphabet, including $1.71bn in Q4.

Greater transparency

Now that Google has disclosed its earnings for YouTube, it can be compared with other media firms – such as Discovery, which previously disclosed it made $10.6bn in 2018 from advertising, versus YouTube’s $11.16bn.

The decision to reveal advertising revenues from YouTube and cloud was pushed by Alphabet’s new CEO Sundar Pichai, who has called for greater transparency at Google and its other services. Pichai recently took over the role of Alphabet CEO after Larry Page stood down, alongside fellow Google co-founder Sergey Brin who had served as president.

Despite beating earnings expectations this quarter – at $15.35 per share versus the expected $12.53 per share – Alphabet’s shares fell by more than 4pc in after-hours trading.

“Our investments in deep computer science, including AI, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet,” Pichai said in a statement. “I’m really pleased with our continued progress in search and in building two of our newer growth areas.”

Colm Gorey is a senior journalist with Siliconrepublic.com

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