Google sees sharp comeback in ad revenues on both search and YouTube as advertisers renew spending after pandemic slump earlier in the year
The sharp recovery in Google’s ad business was much stronger than most industry watchers had predicted, as the broader tech industry makes a strong comeback from pandemic lows earlier in the year.
Google’s positive figures followed its first-ever quarterly business contraction and came days after the US Justice Department filed a landmark antitrust lawsuit against the company.
Chief executive Sundar Pichai said the company had seen “a strong quarter, consistent with the broader online environment”.
Chief financial officer Ruth Porat said nearly all categories of search advertising started to rebound in August, specifically mentioning the home and garden, computers and work from home categories.
YouTube, which had seen a dramatic fall-off in advertising, saw a 30 percent year-on-year rise in ad revenues compared to $34 billion (£26bn) for the third quarter of 2019.
The figure contrasted with a year-on-year gain of only 6 percent in the second quarter.
“We’re pleased at the degree to which advertisers really reactivated their budgets in the third quarter,” Porat said during a call with investors.
YouTube now has more than 30 million music and premium paid subscribers, with YouTube TV having 3 million subscribers, in spite of a monthly price increase announced in June.
During the call Pichai said views for guided meditation videos on YouTube were up 40 percent since March, with DIY face mask tutorials viewed more than 1 billion times.
Google’s search ad division brought in $37.1bn for the quarter, while its “other” department, including hardware, cloud services and the Play Store, had revenues of $5.4bn, up from $4bn.
The Cloud division brought in $3.44bn, up year-on-year from $2.3bn, while its videoconferencing platform Google Meet had 235 million daily meetings and more than 7.5 billion daily video calls, Google said.
Pichai said the company was prepared to “confidently” make its case against the Justice Department’s antitrust lawsuit and would remain focused on “continuing our work to build a search product that people love and value”.