Alphabet’s Asia growth lags the world
Alphabet Inc. (NASDAQ: GOOGL), the parent company of Google, raked in $11.7 billion from the Asia Pacific region in the quarter ending 30 September, 2021.
In a quarterly earnings call today, Chief Executive Officer, Sundar Pichai, was upbeat about growth in the region.
“September marked 20 years since we opened our first office outside of the U.S. in Tokyo,” said Pichai.
“We now have thousands of employees in 28 offices across the Asia Pacific region, and we are investing in cloud regions and digital skills programs to help expand economic opportunity there.
“Our business in APAC is growing really well.”
However growth in the region during the quarter was softer on a year-on-year basis, compared to all other regions.
In the United States, revenues increased 39% year-on-year, the Europe, Middle East & Africa region was up 42%, while Other Americas (which includes Canada and South America) posted a 56% increase.
Overall though, Alphabet’s results beat most analysts’ expectations and it posted its third quarter in a row of record profit.
Key takeaways from the quarterly report include:
- Google advertising revenue: $53.13 billion, up from $37.1 billion (in Q3 2020)
- YouTube advertising revenue: $7.20 billion, up from $5 billion
- Google cloud revenue: $5 billion up from $3.4 billion
- Total revenue: $65 billion up from $46 billion
- Total profit for the quarter: $18.936 billion ($27.99 per share)
Loopholes emerging in China blackout
All of Alphabet’s Asia Pacific revenue is generated from outside the region’s biggest economy.
Google shuttered its Chinese search operations in 2010 after a series of hacking and censorship controversies. It is now effectively blocked on the Mainland, leaving Baidu (HKG: 9888) as the dominant internet search engine.
In recent years reports have emerged about Google and China repairing the fractured relationship, but no meaningful progress appears to have been made.
In 2019 Google confirmed it had abandoned plans to develop a censored search application for the Chinese market. Those plans were first revealed in documents leaked to The Intercept website.
The same year, Google also abandoned the Google AI China Centre in Beijing, just two years after it was opened.
However, more recently, Chinese residents have had access to Google search through the WeChat app.
This was made public earlier this month when Tencent (the owner of WeChat) released a statement labelling it a “loophole”.
“Due to recent technological upgrades, the official accounts’ robots protocol had loopholes, which caused the external crawlers to scrape part of the official accounts’ content. The loopholes have since been fixed,” said Tencent.