Google saw a double digit growth despite the onslaught of the Coronavirus pandemic to many other businesses.
Usage for the platform is growing, but revenues are decreasing for the company. The demand for the internet has never been higher with people being forced to work from home and students attending school online.
The internet usage is also at an all time high for entertainment purposes. Netflix and Spotify both have reported increase in their subscription base during the first quarter.
Quibi on the other hand braved the storm to release their new video streaming platform. As a result, the overall screen time across countries have increased. The screen time is directly translated to search engine usage, and Google is experiencing the majority of the surge.
Google reported positive revenues for the first quarter of 2020
Google has experienced exponential growth these past few years ever since it diversified its assets to different business services. Nevertheless, ad sales remains its main source of revenues. It accounted for 83% last year’s of the revenues. For the first quarter of the year, the company reported a 10% increase in its ad sales business.
The overall revenues generated by the company had a 13% increase compared to 2019’s performance. The increase amounts up to an estimated value of AU$62 billion. Google attributes this growth mostly to the strong forecast earlier during the year.
Unfortunately, the headwinds turned sour, and forced the business to change its forecast. More Americans have filed for unemployment, and that directly affects the revenues generated from advertisers’ spending in Google’s platforms.
More and more people according their data are using the search engine, but less advertisers are spending on the platform. Additionally, users are searching more about the Coronavirus than for revenue generating channels.
Google’s adjustments moving forward
The company has already announced that hiring will be lessened for the balance year. It is still finding the right spot in managing work from home arrangements of their employees. Unfortunately, the decrease in the hiring will directly affect Google’s commitment to put in place a stronger work force for its cloud computing business.
Several analysts are not forecasting profits or losses for the company, but they are sure that the second quarter will be tough for the company. The only bright spots in the next few months are U.S. elections and the Tokyo 2020 Olympics.
Unfortunately, the latter one has already been postponed to 2021 so ad spending allocations this year will be moved next year.