Google just doesn’t seem to be able to set up a reasonable business activity outside of advertising marketing. In the supposedly so secure cloud business, the company is at least accumulating enormous losses.
For several years now, a number of providers have been promoting the cloud in a wide variety of areas as the usage model of the future. The run on the services provided makes the cash register ring, especially at Microsoft and Amazon, but also at various other companies. And it is by no means as if Google fails to successfully bring its services to the user.
But in terms of business, the area has so far been virtually a total failure for the group. It is true that a number of customers have been won who generated sales of at least $ 13.06 billion last year. But while others achieve fantastic profit margins in the cloud business, Google amassed an operational loss of $ 5.61 billion here.
Billions in losses for years
This is by no means a slip-up. Rather, the losses are steadily increasing: in 2018 the deficit was $ 4.35 billion, in 2019 it was $ 4.65 billion. At least Google was able to more than double its sales during the period. In the end, however, this part of the company is by no means viable and has only existed for years because it is massively cross-financed by advertising.
Advertising On Top
Ultimately, however, that shows how difficult it is for Google parent Alphabet to make money outside of the classic advertising business. At least this one works pretty well. In the fourth quarter alone, the umbrella group generated sales of $ 56.9 billion after $ 46.1 billion in the same period last year. The advertising marketing thus still accounts for well over 90 percent of the total income. The bottom line rose from $ 9.3 billion to $ 15.7 billion. The goal of greater independence from the advertising business has so far not come close to being achieved.
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