On Monday, Feb 3, 2020 Google revealed its Q4 2019 earnings report for its cloud and YouTube businesses for the very first time. But the reveal which was made wasn’t wide enough in scope to gauge the profitability in these two businesses. In the fourth quarter alone the revenue generated by YouTube ads was USD 4.72 billion and in total it was USD 15.15 billion in fiscal 2019. Whereas in year 2018 the revenue was USD 3.61 billion in the fourth quarter and USD 11.16 billion in whole year for YouTube ads segment. YouTube’s non advertising revenue is included in Google’s other revenue segment such as subscriptions for YouTube TV.
On a call with analysts, Ruth Porat, the CFO of Google and YouTube’s parent company Alphabet, said that YouTube’s non advertising revenue reached a USD 3 billion run rate in the fourth quarter. Ruth Porat further added that the most part of the ad revenues is given to the creators of ads, but google never revealed the exact numbers. Despite impressive growth in gross ad revenue over the last two years, it is very hard to gauge how profitable the creation of YouTube advertisement is as spokesperson of Google declines to reveal what percentage of YouTube’s advertising revenue goes to its creators.
As compared to other segments Google’s cloud business is a younger but fast-growing segment of the business. The Google’s cloud business is ambitious ambitions to overtake Microsoft Azure and Amazon Web Services (AWS). In the next few years Google plans to triple its sales whereas it has reached USD 8 billion according to the reveal made by Google in its annualized revenue declaration in July. In December Pichai became the in charge of the broader business as the Former Alphabet CEO and Google founder Larry Page stepped down from the position.
Federal and state regulators have been keeping a close watch on Google and has been looking for any sign of anti-competitive behavior. Google’s ad business has been declared to be investigated by a union of 50 attorneys general from different states and territories.