Google parent Alphabet reported a rare drop in revenue and profit on Thursday in a quarterly update that nonetheless topped market expectations.
Alphabet had 127,498 employees at the end of the second quarter, compared to a headcount of 103,459 at the end of the first quarter. The slide was a stark contrast to digital advertising rival Facebook Inc., which saw overall revenue grow 11% in the quarter.
Alphabet and Google Chief Financial Officer Ruth Porat also acknowledged that the company is continuing to "navigate through a hard global economic environment". Google's cloud business appears to be set to overtake YouTube in the near future and become an important growth centre for the company, challenging Microsoft's Azure product. Shares were essentially flat in after-hours trading following the release. Investors are increasingly interested in the prospects of smaller but faster-growing units. YouTube, the fastest-growing part of Google's advertising empire before the coronavirus set in, brought in US$3.8 billion, six per cent more than a year ago.
One of the main offenders this time around was Google's core search and ad revenue, which was down 9.8% year over year.
"We saw a gradual return in user search activity to more commercial topics throughout the quarter, followed by an increase in spending by advertisers", she said.
The company's board also authorized the company to repurchase up to $28 billion of its Class C shares. "And we are helping many government agencies deliver care for their citizens, including the states of Oklahoma and NY here in the USA, and Italy and Spain in Europe". While hiring has slowed across the board for Alphabet, executives said on the company's call that it was still "hiring aggressively in priority areas like Cloud".
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