YouTube made nearly $5 billion in ad income in the last three months, Google announced today as part of parent company Alphabet’s fourth-quarter earnings statement. This is the first report under newly instated Alphabet CEO Sundar Pichai, who took over as the chief executive of the whole company last year after co-founders Larry Page and Sergey Brin stepped down from day-to-day responsibilities and promoted Pichai, who was previously Google CEO, to the top spot.
The news marks the first time in YouTube’s nearly 15 years as a Google-owned platform, since Google purchased the website in 2006 for $1.65 billion, that the company has shown how much money YouTube-hosted ads made for the company.
Google says YouTube generated $15 billion last year and added about 10 percent to all Google revenue. Those numbers make YouTube’s ad business nearly one fifth the size of Facebook’s, and six times bigger than all of Amazon-owned Twitch.
Google says YouTube has more than 20 million subscribers across its Premium and Music Premium, as well as more than 2 million subscribers to its paid TV service. Alphabet says profits from those products are bundled into the “other” category, which made $5.3 billion last quarter and also includes hardware like Pixel phone and Google Home speakers. That makes it hard to gauge the specific performance of any one product bundled under that section.
Alphabet made $46 billion in revenue in the quarter that closed December 31st, 2019, a 17 percent increase over 2018. Nearly $10.7 billion of that was profit, the company says. Google’s search business remains the huge moneymaker of Alphabet’s sprawling empire, making $27.2 billion for the quarter. But alongside YouTube ad revenue, Google is also revealing the financial execution of its cloud computing division. Google Cloud made $2.6 billion in revenue for the quarter, the report shows.
That means Google beat Wall Street expectations big time on profit but missed on earnings. That could be one reason why Google may be disclosing YouTube and Google Cloud earnings for the first time ever.