Alphabet Had the First Ad Revenue Drop in History

Google's parent Alphabet marked profit and revenue drop in the second quarter of 2020. The main reason is that the earnings from its advertising business fell for the first time in the company’s history.

Net income fell from $9.94 billion in the same period last year to $6.95 billion, while revenue decreased 2% to $38.29 billion. Advertising revenue, which comprises the majority of Alphabet’s overall income, fell 8% to $29.86 billion. Earnings from its cloud unit proved a bright spot, jumping 43.2% to $3 billion, while Other Revenues, which includes Play Store, hardware and non-advertising YouTube revenue, grew 25.6% to $5.12 billion.

Company CFO Ruth Porat said advertising revenue gradually improved throughout the quarter, noting income from its dominant Search channel was essentially flat year-on-year by the end of June. However, she warned it is premature to gauge the durability of recent trends given the obvious uncertainty of the global macro environment.

Separately, Google posted a teaser page online revealing a 3 August launch date for its next smartphone, widely believed to be the Pixel 4a. Cryptic text on the page appeared to contain hints about improved camera and battery features, including better low-light capture capabilities. Google’s last device launch, for the Pixel 4, was held in October 2019.