Google Primed to Benefit From Surge in Online Advertising

Google Primed to Benefit From Surge in Online Advertising

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Google’s parent company is expected to report its largest second-quarter sales growth in 14 years, driven by a gusher of online advertising from businesses vying for customers across reopened economies.

The expected results should deepen investor confidence that Alphabet Inc. emerged stronger after the Covid-19 pandemic accelerated e-commerce purchases, online food orders and streaming video consumption, analysts say. The burst in digital activity has led companies to pour marketing dollars into ads across Google search, Maps and YouTube, underscoring the pre-eminence of the company’s products.

Wall Street expects those trends to stand out in Alphabet’s results from the April to June period, with analysts surveyed by FactSet anticipating sales of about $56.19 billion and profit of $12.94 billion. The company posted $38.3 billion in revenue and $6.96 billion in profit during the same period a year earlier, when the pandemic bruised its digital advertising business.

Other tech companies have benefited from a soaring digital ad market. Snap Inc. last week reported revenue more than doubled behind strong user growth, while Twitter Inc. reported sales surged 74% behind increased advertising.

Google’s expected sales growth reflects a return to form for a moneymaking machine that reported revenue increases every quarter for a decade. The pandemic brought a momentary end to that streak when sales fell 1.8% in the June period last year as major advertisers slashed spending, particularly in a travel sector that accounts for about 15% of sales.

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