Google parent company Alphabet reported better-than-expected quarterly results on Tuesday, with its core advertising business continuing to drive growth even as its other ventures struggled.
**Core advertising business thrives:**
Google’s advertising revenue, which accounts for the vast majority of its income, grew by 12% year-over-year to $54.48 billion in the fourth quarter of 2022. This growth was driven by continued strength in search and YouTube advertising.
**Other Bets face challenges:**
However, Alphabet’s Other Bets segment, which includes ventures such as self-driving car company Waymo, healthcare company Verily, and smart home device maker Nest, reported a combined operating loss of $1.21 billion in the quarter. This loss was driven by increased investments in research and development, as well as lower revenue from hardware sales.
**Cloud computing gains momentum:**
One bright spot for Alphabet in the quarter was its Google Cloud business, which saw its revenue grow by 32% year-over-year to $7.32 billion. This growth was driven by strong demand for cloud computing services from businesses and governments.
**Financial highlights:**
* **Revenue:** $76.05 billion, up 1% year-over-year
* **Net income:** $13.62 billion, down 34% year-over-year
* **Earnings per share:** $1.53, down 31% year-over-year
**Market reaction:**
Alphabet’s stock price rose in after-hours trading following the release of the earnings report. Investors were pleased with the strong performance of the company’s core advertising business and the growth potential of its Cloud business.
**Analysts’ outlook:**
Analysts remain cautiously optimistic about Alphabet’s prospects for the year ahead. They expect the company’s advertising business to continue to grow, while its Other Bets segment may take longer to turn a profit.
**Key takeaways:**
* Google’s advertising business remains its primary growth driver.
* Other Bets continue to face challenges, but Google Cloud shows promise.
* Investors are betting on Alphabet’s long-term potential, despite near-term headwinds.
* Alphabet’s financial results reflect the ongoing shift towards digital advertising and cloud computing..
