According tomedia Techspot, google still generates less than 85 percent of its revenue from advertising revenue, which is why the company has been trying to diversify beyond its core business. The company reported its second-quarter revenue, which fell for the first time in 22 years due to the direct impact of Covid-19 on advertising spending, but believes the worst is over.
Total revenue for the three months to June was $38.3 billion, down 2% from the same period in 2019. That didn’t surprise analysts much, but it did beat expectations of $37.4 billion. Net income was $6.4 billion, down from $9.9 billion a year earlier. Google’s online traffic surged in April and May, but at the same time, advertisers cut back on search ads, a situation that only began to improve in June.
Google is looking to diversify beyond advertising, but its “Other Bets” category continued to falter in the second quarter, resulting in a total loss of $1.12 billion. The highlight was YouTube and its cloud division, which generated $3.81 billion and $3 billion in revenue, respectively.
On an investor conference call, Google CEO Sundar Pichai noted that while the economic environment remains difficult, the company is confident that its hardware efforts will pay off in the coming quarters. “As people increasingly turn to online services, our platforms — from cloud computing to Google Play to YouTube — are helping our partners deliver important services and support their businesses,” Picchay said. “
Overall, the search giant appears confident in its ability to weather the storm, which has forced companies such as Uber, GoPro, Lyft, Patreon, Kickstarter, Leap Magic and AT?amp;T to make ends meet. Google has managed to avoid layoffs by cutting its marketing budget and suspending hiring, and it will allow employees to work from home for 12 months, most likely continuing to save on operating costs.