Google sales

Google’s sales growth set to continue despite broader economic concerns

Google parent alphabet Inc.

GOOG -3.04%

is expected to see strong sales growth despite global economic turmoil, propelled by digital ad spend in its core search business.

Rising inflation, supply chain disruptions, Russia’s war on Ukraine and other factors have weighed on the economic outlook and, analysts say, corporate appetite to spend in advertising.

Instantaneous Inc.

said last week that these pressures had affected its financial results in the last quarter and could harm the advertising market in the future.

Google’s search advertising, often tied more closely to specific customer purchasing decisions than broader brand awareness campaigns, should be less affected by broader economic concerns. A rebound in travel as pandemic-related restrictions continued to ease helped support the company’s revenue growth, analysts said.

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Wall Street expects Alphabet to generate $68.1 billion in sales and $17.4 billion in net income for the first quarter of the year, according to the consensus estimate of analysts polled by FactSet.

The projected 23% increase in quarterly sales from the year-ago period would be the lowest rate since late 2020 for the tech giant. At the time, the company experienced a period of massive sales growth, as small and large companies flocked to the advertising market seeking to win over customers who had spent the first period of the pandemic sequestered at home. . The company’s sales grew 41% last year.

Alphabet is also expected to see strong revenue growth from its cloud computing business, where it is trying to catch up with Amazon.

com Inc. and Microsoft Corp.

Cloud activity remains a heavy investment area for the company and Google Cloud Services remains unprofitable.

Last month, Alphabet said it planned to spend nearly $5.4 billion to buy cybersecurity firm Mandiant. Inc.

to better automate cyber defenses by injecting specialized intelligence into one of the world’s largest platforms for cloud-based tools. Investments in cybersecurity have become something of an arms race among cloud service providers, with a wave of ransomware and other attacks raising concerns among customers about data security. Microsoft, which also reports its results on Tuesday, has also beefed up its cybersecurity offering.

Google Cloud’s sales are expected to reach $5.75 billion, up from about $4 billion a year earlier, resulting in an operating loss of $752 million.

YouTube, the Internet’s largest video destination, is expected to generate $7.48 billion in sales in the first quarter. That compares to $7.87 billion in first-quarter revenue for streaming media subscription service Netflix..

Inc. Alphabet has increased its spending on YouTube to maintain its lead in video by funding an alternative to TikTok, YouTube Shorts, and adding live shopping.

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Write to Meghan Bobrowsky at [email protected]

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