Google Sets New Record With Advertising Power Accumulation

( Alphabet, the parent company of Google, set new highs for itself in terms of sales for the first quarter of 2021. What fueled that fire was a huge surge in spending on digital advertising.

At the same time that Google is soaring to new heights with digital advertising, the federal government is working toward possibly curtailing the power of the company through regulations.

The pandemic has forced a lot of business online. And the best way for these companies to get recognized is through digital advertising. Google, along with Facebook, is one of the world’s leaders in digital advertising providers.

With so many people turning online for more outlets in their lives, including getting groceries delivered, takeout meals and other goods, they’ve turned to Google. And as people have tried new things at home, they’ve also turned to YouTube, also owned by Alphabet, for how-to instructional videos.

That all led to a huge uptick in advertising revenue for Google.

When Alphabet reported its sales for the first quarter of this year, it showed it sold $55.31 billion in goods, which represented an increase of 34% from the year before. All advertising, even digital, plunged in the first quarter of 2020 with the onset of the pandemic, as companies sought to keep as much money on hand as they possibly could.

Now, though, they are spending money on advertising again, just directing it online rather than traditional means such as radio, print and TV.

With those record sales, Alphabet also reported a profit that more than doubled. Their per-share earnings exceeded the expectations of most analysts considerably.

From signature products such as Gmail, search and maps, Google reported $31.88 billion in sales. That was a 30% increase over last year. YouTube alone reported $6 billion in sales, nearly double the amount that it did a year ago.

All of that resulted in an $18 billion profit for Alphabet in total, a whopping 162% uptick from a year ago.

Following the earnings report, Google also announced it would be buying back $50 billion worth of shares, which fulfilled the wishes of many investors who were worried about the cash reserves Google had on hand. As a result, the company’s shares increased more than 4% following the announcement.

As the chief investment officer at Ensemble Capital, Sean Stannard-Stockton, explained:

“Google has the wind at its back now. It didn’t just glide through COVID. It’s really well-positioned and is even stronger.”

The exploding growth of Google is amazing, considering it is losing its overall share of the digital advertising market. Last year alone, Google saw its share of the search market fall to 57%. It was 61% a year before that.

In that same time period, Amazon saw its share of search increase from 13% to 19%.

It seems that maybe the only obstacle to Google’s continued success is regulators. Alphabet is facing antitrust lawsuits from the Justice Department and various states, which claim the company has worked to thwart competitors in the marketplace.