INSUBCONTINENT EXCLUSIVE:
Alphabet has blamed currency exchange rates and its constant tweaking of featuresSan Francisco: Alphabet Inc's new Chief Executive Sundar
Pichai unveiled sales figures that investors have long demanded, but shares fell 5 per cent as Google's advertising business and the new
data about YouTube and Google Cloud broadly disappointed
Mr Pichai had sought to counter slowing revenue growth in the company's main advertising business by pointing to the Silicon Valley firm's
younger units.But Mr Pichai's reveal that Google's YouTube video streaming unit is generating ad revenue at a pace of $15 billion annually
put it below rough estimates as high as $25 billion.Divulging 53 per cent quarterly revenue growth for Google's cloud services compared with
a year ago meant it grew slower than the business it is trying to catch up to, Microsoft Corp's Azure.It reported a 62 per cent quarterly
rise in sales last week, or 39 per cent when considering some cloud services Microsoft sells through other units.While financial analysts
applauded the new transparency from Alphabet, some questioned executives for the second time in the last four quarters to explain why
overall revenue has been missing or just barely meeting their expectations.Sales growth dipped below 20 per cent in three quarters during
2019, compared to just once in the previous three years.Alphabet has blamed currency exchange rates and its constant tweaking of features,
saying that it is not focused on quarterly marks."We continue to be very focused on the benefit from better measurement, better ad delivery,
better user experience," Alphabet Chief Financial Officer Ruth Porat responded to an analyst."But there will be variability over time
because we're very focused on what's in the right long-term interest
"Shares of the company fell about 4.5 per cent in extended trading to $1,416."The stock was priced for perfection, and a top-line miss was
enough to send it lower," said Michael Pachter, analyst at Wedbush Securities."YouTube was impressive at $15 billion for the year, Cloud
less so at $8.9 billion." Other financial analysts said YouTube's ad revenue was underwhelming too."YouTube is smaller than generally
assumed, but on the flip side, search seems to have accelerated and is growing faster than feared," said James Cordwell, analyst at Atlantic
Google through its namesake search engine as well as properties such as YouTube has been the web's biggest draw for advertisers for a
decade, enabling it last month to become the fourth listed company to top $1 trillion in market capitalization
But new concerns have emerged among investors about whether its dominance will last as U.S anti-trust regulators investigate Google and as
Amazon and Facebook Inc continue to grow their ads businesses globally.Both beat analysts' expectations last week
Alphabet's overall sales in the fourth quarter were $46.08 billion, up 17 per cent, compared with an average estimate of $46.94 billion
among financial analysts tracked by Refinitiv.Google ad sales in the holiday shopping quarter were $37.93 billion, up 16.7 per cent from the
Alphabet's expenses have ballooned with hiring of thousands of salespeople, building of new data centers and marketing the Google brand
billion, or $15.35 per share, compared with the analysts' average estimate of $8.787 billion, or $12.53 per share.Hardware sales fell in the
fourth quarter compared with a year ago, Ms Porat said.Results could suffer further from any protracted work stoppages in Asia as companies
combat the outbreak of a new coronavirus in China, she said
Google last week temporarily shut down all its offices in mainland China, Hong Kong and Taiwan due to the coronavirus.It has thousands of
engineers across the region, including a hardware engineering center in Taiwan
In December, Google CEO Pichai gained the additional role of Alphabet CEO from Larry Page as he and fellow co-founder Sergey Brin stepped
back even further from day-to-day management
The new YouTube disclosures under Mr Pichai showed ad revenue grew 31 per cent compared with last year.Mr Pichai also said YouTube, which
has 2 billion monthly users, generated about $750 million in subscription and other non-advertising revenue, but did not reveal a figure for
the year-earlier period.Mr Pichai said YouTube had 20 million paid subscribers between YouTube's Music and Premium ad-free viewing packages,
and separately had 2 million paid subscribers for YouTube TV, which competes with Dish Network Corp's Sling TV and Walt Disney Co's Hulu to
Amazon recently said it has 55 million music subscribers, while Apple Inc last year announced 60 million such subscribers.Sling had about
2.7 million subscribers as of last year, in line with estimates for Hulu
Shares of Alphabet were up 28.1 per cent in the last 12 months entering Monday, compared with 21.8 per cent for Facebook shares, 23.5 per
cent for Amazon, 68.1 per cent for Microsoft and 88.7 per cent for Apple Inc.
