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Google breaks out YouTube ad business for first time

Google bought the video platform in 2006, building it over the years into a dominant player in the internet video market.
YouTube Unveils A Virtual Cable Subscription
YouTube Inc. signage is displayed at the YouTube Space LA venue in Los Angeles on Feb. 28, 2017Patrick T. Fallon / Bloomberg via Getty Images file

Google’s parent company, Alphabet, revealed Monday that YouTube brought in $15.2 billion in 2019, the first time that the company has revealed financial details about the video platform.

As part of its quarterly earnings report, Alphabet reported that YouTube generated $4.7 billion of revenue in the fourth quarter of 2019. Those figures don’t include revenue from other sources, such as subscriptions to YouTube TV or YouTube Premium.

Monday’s earnings report also provided historical perspective for YouTube’s ad growth, which has nearly doubled from $8.15 billion in 2017.

Ruth Porat, chief financial officer of Alphabet, said on a conference call with analysts after the earnings release that the new details were meant to provide a more complete look into the company’s various lines of business.

“To provide further insight into our business and the opportunities ahead, we’re now disclosing our revenue on a more granular basis, including for Search, YouTube ads and Cloud,” Porat said.

Details about YouTube’s business had been a closely guarded secret. Google bought the video platform in 2006, building it over the years into a dominant player in the internet video market.

Alphabet’s report also stated that Google’s cloud business had $8.9 billion in revenue for 2019 and that revenue from searchand other ads businesses hit $98.1 billion.

It’s the first earnings report since Sundar Pichai, the CEO of Google since 2015, also became the CEO of Alphabet in December. That’s when Google co-founders Larry Page and Sergey Brin announced they would be stepping back from their roles as CEO and president, respectively.

The increased transparency into the company’s revenue comes as Google and other Silicon Valley companies face increasing antitrust scrutiny from regulators. Google in particular has faced questions about its ad business and its dominance in the space. In September, the attorneys general from 48 states, the District of Columbia and Puerto Rico announced a joint investigation into the company.

Alphabet’s total quarterly revenue of $46.1 billion came in slightly below analyst expectations. The company’s share price declined more than 4 percent in after-hours trading on Monday afternoon.