Google misses revenue targets as online advertising growth declines - but Google Cloud pulls-in $8.9bn in 2019

Cloud computing turned over $8.92bn in 2019, while EU fines fell from $5.1bn to 'just' $1.7bn

Google parent company Alphabet has missed its fourth-quarter revenue estimates as a result of slowing advertising sales growth.

The company posted revenues of $46.08 billion for its 2019 fourth quarter, compared to Wall Street expectations of $46.93 billion. As a result, Google failed to become a $100 billion company in 2019, registering full-year revenues of $98.12 billion.

Nevertheless, the results were scarcely disastrous. Revenues still grew by 17 per cent in the fourth quarter, and by 15 per cent for fiscal 2019.

Google's ad revenue increased to a record $37.9 billion in the fourth quarter, but came in under analysts' consensus estimates.

The company also disclosed for the first time the numbers for YouTube, the video sharing platform on which it has been pushing more advertising, and its cloud segment.

YouTube's ad revenue increased by 31 per cent to $4.72 billion in the fourth quarter. In total, the segment generated revenue of $15.15 billion in fiscal 2019, compared to $11.16 billion in 2018 and $8.15 billion in 2017.

Alphabet chief financial officer Ruth Porat said in a conference call that YouTube's non-advertising revenue, including subscriptions for YouTube TV, reached a $3 billion in revenue run rate in the fourth quarter.

Google Cloud revenue in the fourth quarter increased 53 per cent, to $2.61 billion. Revenue from Cloud was $8.92 billion for 2019. While Google is currently the third largest cloud company in cloud, it still lags a long way behind Amazon Web Services (AWS), which reported $9.9 billion revenue in the fourth quarter of 2019.

"Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet," said Sundar Pichai, CEO of Alphabet and Google.

"I'm really pleased with our continued progress in Search and in building two of our newer growth areas — YouTube, already at $15 billion in annual ad revenue, and Cloud, which is now on a $10 billion revenue run rate."

Alphabet also disclosed that it paid $1.697 billion in fines to European Commission in 2019, compared to $5.1 billion in 2018.