Alphabet, Google’s parent company (NASDAQ: GOOG, GOOGL), is experiencing a sharp rise in its non-advertising revenue. Its business is divided into two reportable segments that include Google & Other Bets.
Alphabet’s main source of revenue from the Google segment is advertising which accounted for more than 85% of the company’s entire revenue in 2018. In 2019, the share of advertising revenue has declined to less than 85% of the company’s net revenue. The share of non-advertising revenue in the net revenue of google has kept rising over the past three years. The total nonadvertising revenue of google has grown by more than 90% from 2016 to 2018. According to 2018 form 10K of Alphabet, non-advertising revenue in 2016 stood at $10.6 billion which grew to $19.9 billion in 2018. The fourth quarter non-advertising revenue of Alphabet in 2018 reached $6.5 billion compared to $4.97 billion in 2017 Q4.
Here is how much Google generated from non-advertising businesses during past four years:
|Year||NonAdvertising Revenue ($mn)|
The sources of non-advertising revenues of Google include sales of apps, in-app purchases, digital content products, and hardware; and licensing and service fees, including subscription fees for Google Cloud offerings.
In fiscal 2019 as well, Google’s non-advertising revenue has grown sharply. Check the table below. (Sums are in millions)
As you can see, Google’s non-advertising revenue has gained significantly compared to the previous year in 2019. The total revenue of Google during fiscal 2019 at the end of the third quarter was $18,058 million compared to $13,419 million during the same period the previous year. The net revenue of Google during the fourth quarter of 2019 grew to $45.8 billion compared to $39 billion in 2018.
Google is the leading search engine in the world with the largest market share. Its core source of revenue is digital advertising where it leads the industry. The parent company of Google is Alphabet which also operates other businesses (collectively termed as other bets) apart from Google. Google is the largest business segment of Alphabet which has enjoyed revenue growth from the cloud as well as YouTube ads in recent years. The company has its headquarters in Mountain View, California, United States. The CEO of Alphabet is Sundar Pichai. Google was founded on 4th September 1998 at Menlo Park, California, United States. The head office of Google at Mountainview, California, is known as Googleplex.