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Alphabet, Google’s parent company, returns to record profits

Google’s parent company Alphabet posted record earnings for the third consecutive quarter, driven by increased ad spend as more consumers shopped online during the pandemic.

The company revealed that it beat expectations for quarterly revenue, although it has been hit by new restrictions on how it tracks customers online.

Alphabet, the world’s largest provider of search and video ads, saw revenue rise to $ 65.1bn (£ 47.29bn), while Google sales rose 41% to $ 53.1 billion (£ 38.58 billion).

Meanwhile, Alphabet’s quarterly earnings reached $ 18.93 billion (£ 13.75 billion), generating a third consecutive quarter of record earnings for the company.

Alphabet shares are up 24% in six months and 62% year-to-date, far outpacing the market as a whole as consumers have spent more of their lives online during the pandemic.

 

But investors are concerned about recent changes in the way the company tracks users. In April, Apple introduced a new privacy notice that allowed users to block companies like Google and Facebook from tracking their activity on other apps and websites.

The update was included in iOS 14.5, which requires iPhone apps to obtain permission from the device owner before collecting this additional data.

The change has already affected the results of Snapchat and Facebook this quarter, the companies said this week.

Google is also facing pressure from US lawmakers and campaign groups who argue that the company has too much power.

In a court case brought by a group of US states that was released this week, the group says the search giant is abusing its monopoly power over online advertising to limit competition and harm. to customers.

“Google is now using its immense market power to extract a very high tax of 22% to 42% from advertising dollars that would otherwise go to countless online publishers and content producers, such as online newspapers, kitchen websites. and blogs that survive by selling ads on their websites and apps, ”he states in the unwritten record.

Bloomberg News reported last month that the US Department of Justice was preparing to sue Google for its ad technology business practices, citing violations of antitrust laws.

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