In 2022, Alphabet Inc, the parent company of the search engine giant Google, had a financial setback. In comparison to the previous year, Alphabet net profit fell by more than $1 billion, but revenue increased by a substantial amount.
In 2021, Alphabet generated a record-breaking $257 billion in annual revenue. This was the company’s first year exceeding $200 billion in revenue, but the start of 2022 appeared to be even more profitable. According to Alphabet, sales in the first quarter of 2022 increased by 23% over the same period last year, hitting $68 billion.
The company’s net profit, on the other hand, is a different story. While Alphabet’s profits increased in 2022, so did its expenditures. As a result, the net profit fell to $16.4 billion, down from $17.9 billion the previous year. This was due to a $1 billion rise in Research & Development costs over the previous year, bringing the total to $9.1 billion.
Read more: Tech giants post second-quarter profits of over $50 billion
According to the New York Times, Alphabet gained $4.8 billion profit in stock holdings last year, but lost $1.07 billion in the first quarter of 2022.
This year, Google Search generated $39 billion in income, up from $31 billion the previous year. In the first quarter alone, Google Search, Ads, and YouTube brought in $54 billion.
YouTube’s ad revenue increased over the previous year, but at a lesser speed than in previous years. Due to growing competition from TikTok, the video-sharing platform expanded by 30% in 2021, but only by 20% this year.
YouTube has retaliated by focusing more resources on YouTube Shorts, but the results have fallen short of analyst forecasts.
Sundar Pichai, the CEO of Google and Alphabet, reacted on the financial report for the first quarter the documented the slowed down profit, saying, “Q1 saw great growth in Search and Cloud, in particular, which are both supporting people and companies as the digital transformation continues.” We’ll make significant investments in high-quality products and services, as well as possibilities for partners and local communities all over the world.
