Google is one of the most profitable companies in the world. Google’s parent company, Alphabet, posted net income of $76 billion for 2021. In its annual report, Alphabet reports profit for Google and for its non-Google businesses (called “Other Bets”) separately. Google has two operating segments: Google Services and Google Cloud.
Both Google Cloud and Other Bets lost money in 2021. Thus, Google Services was responsible for all of Alphabet’s profit. Google Services makes money from a variety of products and services, but 88% of its revenue comes from advertising. Thus, Google (and by extension Alphabet) makes nearly all of its money from advertising. Alphabet is trying to diversify its revenue streams, particularly by signing more customers up for Google Cloud, but whether Google can achieve the same kind of access it has achieved with advertising remains to be seen.
0:00 Introduction
0:40 Alphabet’s total profit
1:13 Google Services
1:26 Google Cloud
1:37 Other Bets
2:07 Advertising: main source of revenue
2:33 Google Cloud vs Amazon Web Services
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