Google's non advertising revenue is growing fast

 Alphabet (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 decline 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. 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:

 

YearNonAdvertising Revenue ($mn)
2016$10,601
2017$14,970
2018$19,901
2019$25,932

 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)

 2019.
Q1$5,449
Q2$6,181
Q3$6,428
Q4$7,878

As you can see, Google's non-advertising revenue has gained significantly compared to the previous year in 2019. 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 previous year. Net revenue of Google during the fourth quarter of 2019 grew to $45.8 billion compared to $39 billion in 2018.