Google entertain questions after releasing its Q4 financial report


Today, Google’s parent company, Alphabet, released its Q4 2018 financial results. After the results announcement, Google CEO Sundar Pichai and CFO Ruth Porat held an analyst conference call to answer questions about the business.

The first question came from Eric J. Sheridan, an analyst at UBS Securities.

Question: I have two questions. The first question is about the Youtube business. The YouTube business has launched a number of products, YouTube Premium, TV, music, how do you position these product brands to address global market opportunities, especially in the mobile consumer media and global business areas. The second question is to Porat. You mentioned YouTube’s revenue growth and also mentioned spending growth. Is this because of the procurement expenses of authorized content? For example, the cost of YouTube TV and music content? Please talk about the impact of YouTube’s spending on Google’s revenue costs.

Pichai: Regarding YouTube, our core strategy is to build products around YouTube, focusing on the scale advantages of each product in the world, which are very good. We’re committed to protecting the YouTube Premium experience and providing what users want, and YouTube music is part of this strategy. We are investing heavily. YouTube TV is currently available only in the US market. This is a very exciting and distinctive product that has important long-term value for us because it can integrate our advertising products, including the ability to sell TV commercials. We have seen opportunities and are therefore actively investing. We are also looking at various business indicators, engagement indicators, revenue growth, and we have seen many opportunities in this business.

Porat: Speaking of YouTube’s revenue and investment. Overall, YouTube is benefiting from our massive investment in content, which is also reflected in strong revenue growth. Brand marketing and other marketing revenues are growing aggressively, and especially gratifying is the growth of TrueView video advertising. These have brought value to our users and advertisers, driving revenue growth in all areas. As for the increase in revenue costs, the content procurement investment brought by business growth is indeed the main reason for the increase in revenue costs in our fourth quarter.

The second question comes from Evercore analyst Anthony DiClemente.

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Question: I have two questions. The first question is for the CFO. In the quarterly earnings report of Alphabet, the losses of other investments (Other Bets) increased from the previous season and the previous year. Is this because of the investment in Waymo? Can you give us more information about Waymo and other investments? My second to the CEO, can you talk about the situation of Google Cloud business, is there any milestone data? With regard to investment, employee numbers, revenue growth, and leadership change, what do you think the new CEO, Thomas Kurian, can bring to Google Cloud Services to accelerate the growth of cloud business revenue.

Porat: Regarding the “other investment” piece, it is important that we are investing extensively. We will focus on each specific opportunity to make the right size of investment through specific processes and business assessments. This is also reflected in the increase in the valuation of the equity we invest in.

Picay: Regarding Google Cloud, we have more than 5,000 large corporate customers who have signed contracts for many years around the world. This is the business we need to focus on. Diane Greene and Thomas Kurian work closely together to ensure the leadership of the Google Cloud business, and we will continue to invest, expand our business, bring it to market, and sell through our direct and channel partners.

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TechSina

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