Google's Cloud computing unit, a business that the tech company is pushing to challenge Microsoft and Amazon, is now on course to generate around $10 billion in yearly profits.
Google said it earned $2.6 billion in sales in the final quarter of last year, an increase of around 35 percent from its year-ago period. Those impressive figures complement the resume of Thomas Kurian, who just completed 12 months as Google Cloud's top boss.
The company had disclosed in July that its Cloud business earned a consistent yearly sale rate of $8 billion, which elicited positive feedbacks from New York market observers. The revenue report marks the first time that Google had made public its financial record from its Cloud business in over a year.
According to Sundar Pichai, Alphabet chief executive officer, they are really happy with the steady growth in Google Search and the rise of the company's "newer growth areas" - YouTube, which has just earned $15 billion in yearly ad sales, and Cloud, which currently is on a $10-billion revenue blowout.
However, despite the strong numbers, Google said it still lags behind the dominant players in the Cloud competition: Microsoft Azure and Amazon Web Services.
Amazon Web Services posted nearly $10 billion in total sales for its most recent quarter, suggesting that it more or less surpassed Google Cloud's sales growth by 400 percent.
The online search giant has also, for the first time, announced advertising profits from its online video platform YouTube, which were approximately $4.7 billion for the quarter.
Stocks of parent company Alphabet were down over 5 percent after financial results were released late Monday, even as revenues climbed almost 20 percent and exceeded estimates for the last quarter last year.
Buoyed by minimal taxes, Alphabet on Monday divulged that it gained more than $10 billion, or $15.35 a share, over the $12.49 per share that analysts surveyed by FactSet were anticipating.
The company's net income, less advertising expenditures, was pegged at $37.5 billion, up 19 percent from a year earlier, which was the second tough quarter in a row for the online search behemoth.
Synovus Trust Company portfolio manager Dan Morgan pointed out that Wall Street is now feeling the jitters that Google's weaker than estimated ad sales report could mean a broader downturn in spending on digital ads.
While Google still leads in the online advertising market, the company is witnessing a deepening rivalry from social media giant Facebook and e-commerce king, Amazon.
