Accused of illegal monopoly, Google almost doubles its annual profits

Accused of illegal monopoly, Google almost doubles its annual profits

The online advertising giant, which has largely benefited from the new consumption patterns that have arisen with the pandemic, is accused by American states of having entered into an illegal agreement in 2018 to establish its dominance in the online advertising market.

Google made $76 billion in annual net profit in 2021, nearly double that of 2020, after a particularly successful holiday season for the online advertising giant accused of illegal monopoly by various authorities.

In the fourth quarter alone, the American group once again greatly exceeded market expectations, with 75.33 billion dollars in turnover (+ 32%), from which it generated 20.64 billion in net profits, after its results press release published on Tuesday 1 February.

The world leader in online advertising faltered slightly at the start of the pandemic when some advertisers, such as tour operators, put their campaigns and promotions on hold.

Changing consumer habits

But the series of confinements and the digital habits adopted for almost two years have finally greatly benefited Google as well as other technology companies, from Apple to Meta (Facebook) via Amazon and Microsoft.

Telecommuting and online commerce, in particular, allow the search engine and YouTube to attract more and more brands eager to track potential customers. “Since the beginning of Covid, we have seen consumer habits change ,” observed Philipp Schindler, vice president and chief sales officer, during the conference call with analysts. “In 2020 and 2021, they spent more money, earlier and more consistently ,” throughout the holiday season.

In all, Google raked in more than $61 billion in advertising revenue in the fourth quarter, driven primarily by online search and its video platform. Retail advertisers were the biggest contributors, followed by those in finance, entertainment and travel.

Growth that should continue in 2022

The cloud branch meanwhile grew by 45%, to 5.5 billion in turnover, and the group's boss, Sundar Pichai, said that the volume of contracts signed for the Google Cloud platform jumped by 80%. over the year 2021. He also welcomed “record quarterly sales despite supply chain difficulties” for Pixel, his smartphone brand. Alphabet, Google's parent company, released the Pixel 6 in the fall, a new line of devices with a company-designed processor and plenty of artificial intelligence features.

The company also said its board had approved a 20-for-one stock split to make it more affordable for retail investors. The title took more than 9% during electronic trading after the closing of the New York Stock Exchange, at more than 3,000 dollars.

In 2021, Google's results "pulled the whole market up, which led us to revise our forecasts upwards ," said Paul Verna, analyst at eMarketer. The firm predicts that this growth will continue in 2022: digital advertising should bring more than 171 billion dollars to Google this year, or 30% of the global cake, just ahead of Facebook (24% market share).

Accusations of illegal practices

This leading duo and their advertising targeting methods have been the subject of various investigations, complaints and fines for years. In Europe and the United States, the pace of lawsuits has accelerated , without slowing down the growth of Silicon Valley.

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