Mountain View

A gusher of a year: Alphabet, Google’s parent company, reported sales growth of 32% to $75.3bn in the final quarter, compared with a year earlier, ending a year in which annual profit almost doubled from 2020, to $36bn – more than the 2021 profits of Goldman Sachs and Visa combined, says Tripp Mickle in The Wall Street Journal. Profit in the quarter rose by 32% to $20.6bn. The tech giant has benefited from a surge in advertising spending as brands rushed to appeal to customers at home during the pandemic. Alphabet also announced a 20-for-one stock split, reducing the share price from around $2,753 to $138, and making the shares more accessible to retail investors.

Alphabet’s YouTube video-streaming service performed particularly well. Total advertising sales rose by a third to $61.2bn in the December quarter. It is also set to launch YouTube Shorts in response to the challenge posed by rival short-video platform, TikTok. But even that may not be enough to stem Alphabet’s quarterly slowdown in sales growth from the 41% rise recorded in the July-to-September period, not least as disruption from Covid-19 recedes. One hope lies in the lucrative cloud-based data storage market, dominated by Amazon, with its 33% market share, and Microsoft with 20%, says Gina Chon on Breakingviews. The barriers to entry are high. But if Alphabet can match Microsoft’s profit margin, it could rake in $10bn in operating profit on estimated cloud revenue of $26bn for this year. “Once it rains, it ought to pour.”