YouTube Revenues Disappoint as Google Parent Company, Alphabet Declares 2019 Earnings

Google parent Alphabet CEO, Sundar Pichai has made known the company’s revenue figures, indicating growth in all of the company’s key segments.

In 2019, Google made a total revenue of $162 billion, an 18% year-on-year (YOY) growth compared to the $137 billion made in 2018. This increased the company’s revenue from $31 billion in 2018 to $34 billion in 2019.

Google’s annual revenue:

2019 $161.9 billion
2018 $136.8 billion
2017 $110.9 billion
2016 $90.3 billion
2015 $74.9 billion
2014 $66.0 billion
2013 $55.5 billion
2012 $46.0 billion
2011 $37.9 billion
2010 $29.3 billion
2009 $23.7 billion
2008 $21.8 billion
2007 $16.6 billion

— Jon Erlichman (@JonErlichman) February 3, 2020

This shows Google is still growing very fast for an already massive company. But despite the obvious growth, the revenue made by Google’s advertising business, YouTube and Google hardware, broadly disappointed analysts who simply expected more.

This disappointment is said to most likely be what sent the company’s shares 5% below it normal price.

For Google ads business, while it’s still hugely profitable, it however failed to reach $38.4 billion projected by analysts. It actually made $37.6 billion which, though represents a 17% gain in sales YoY, is still slower than the 20% YoY growth from Q4 in 2018.

Google’s hardware segment, “Google Other,” was the biggest disappointment for many. It only grew from $4.8 billion to $5.3 billion compared to the projection of around $8.7 billion for Q4.

YouTube Numbers Finally Revealed

For the first time, Google revealed revenue numbers for YouTube. Prior to now, the company has always bundled the revenue of its video arm, YouTube under the Google Other revenue, where its hardware and cloud revenues were listed.

This has made it quite difficult for analysts to find out the real value of the platform, with many merely speculating over the value. Last year, The New York Times estimated that YouTube generated between $16 billion to $25 billion in annual revenue.

Wow. Google announcing YouTube's annual ad revenue for the first time. YouTube ads generated $15 billion!

— Sarah Frier (@sarahfrier) February 3, 2020

But according to Google reports, YouTube ads generated sales of $15.1 billion in 2019 – excluding paid subscriptions. Although this represents a 36% increase from the 2018 figure, it is still below even the minimum estimate of value.

That's close to 10 percent of Google's annual revenue, and about 20 percent of what Facebook made in 2019.

— Sarah Frier (@sarahfrier) February 3, 2020

Google has always said YouTube is a major source of growth. And while analysts might be disappointed at the reported value, it still doesn’t take away the truth in that fact.