Alphabet reported its first-ever revenue decline, illustrating how not even the traditionally insulated world of the Silicon Valley is completely immune to this year’s challenges. Its quarterly turnover amounted to $38.3 billion, 2% down annually. The good news for investors is that this turn of events was already accounted for. If anything, analysts were too bearish seeing how Alphabet’s revenue actually surpassed street estimates by about a billion dollars.
A reminder why “breaking up Google” may be impossible
Otherwise, Alphabet’s Q2 2020 earnings were met with little interest from the general public; its stock was largely unchanged following this week’s release which just confirmed Google is, unsurprisingly, still a crucial component of the holding company’s portfolio. Not just in the sense of being responsible for the majority of its income but for subsidizing a wide variety of its other businesses, even those that are generally considered successful and independent – which serves as a reminder why the recent antitrust scrutiny of Alphabet is unlikely to amount to anything in the foreseeable future.
For example, one of the highlights of the Q2 report was YouTube, whose advertising revenue surpassed $3.8 billion, or some 10% of the overall turnover. Yet an independent YouTube would hardly come close to those figures seeing how much it relies on Google infrastructure and digital marketing tools.