Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » World » Churning ad machine drowns out Google’s troubles

    Churning ad machine drowns out Google’s troubles

    By Shira Ovide5 February 2019
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    In case you were worried, the advertising titans of the Internet are doing just fine.

    Facebook showed that last week by reporting a 30% jump in fourth-quarter revenue from a year earlier. It was the lowest growth rate in the company’s short history, and the company has many challenges to keep growing, but it turns out that Facebook keeps making bank because its ads work and the company is willing to plaster them all over its Internet hangouts.

    The same appears true for Google parent company Alphabet. For the sixth consecutive quarter, the company’s advertising sales rose at least 20%, the company said on Monday. It barely brushed that mark in the fourth quarter, but that’s a hard pace to keep up for a company with more than US$100-billion in sales. Amazon does it, too, albeit with a fraction of Alphabet’s profits.

    The global market for advertising appears to be finite, and Google and Facebook already grab a large share of spending

    The list of worries for Google and Facebook is long. Growth is slowing and costs are climbing. The global market for advertising appears to be finite, and Google and Facebook already grab a large share of spending. Competition is fierce for Web surfers at home and abroad.

    But shut all that out, and the two best business models the Internet has ever seen are still humming.

    One stunning number is telling about Google’s effectiveness as a business. The company said that in the fourth quarter, the number of clicks on advertisements on Google’s websites increased 66% from a year earlier. That means Google places many more commercial messages in more places, people are surfing Google hangouts more, and the ads are generating results for the companies that buy them.

    Shrinking

    The downside is average ad prices are shrinking as Google serves more commercial messages through computerised placements and on YouTube — both of which tend to have lower prices than Google’s traditional desktop PC Web search messages. Ad prices dipped 29% on Google websites in the quarter.

    And Google is spending a fortune. Operating costs climbed a bit faster than revenue, and Alphabet devoted an eye-popping $25-billion to capital expenditures in the last year. The number of new employees — excluding contractors and the like — jumped 23% in a year to nearly 100 000. (The company said its growth in capital spending and hiring will moderate this year.) Stock watchers appeared to focus on the negative for Google. Shares dipped about 3% in after-market trading on Monday.

    On a conference call with stock analysts, Google cited YouTube’s Web video programmes, the operation of its computer network and its own line of hardware as reasons for the jump in operating costs. It is simply getting more expensive for Google to stay Google.

    There are also many scary unknowns about Alphabet. Most of the company is a black box. Little is known about the finances of YouTube, Google’s homegrown smartphones and other hardware, its cloud-computing operation, and potentially promising experiments such as driverless cars. Are they working, and what does working mean? It’s unclear. Sundar Pichai, Google’s chief executive, used the word “focus” several times Monday in talking about the company’s cloud-computing business, which hints that Google is resetting a bit in that business.

    Google has its fingers in every conceivable corner of industry, and then some. But investors can look past the mysteries and the spending splurges as long as the ad business keeps running.  — (c) 2019 Bloomberg LP



    Alphabet Google Sundar Pichai top YouTube
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleCrypto exchange founder dies, taking R2.7-billion with him
    Next Article Amazon’s next targets are Google and Facebook

    Related Posts

    Stolen phone? Samsung now buys you an hour to lock it down

    18 June 2025

    Major rift opens between Microsoft and OpenAI

    17 June 2025

    Meta bets $72-billion on AI – and investors love it

    17 June 2025
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.