Cloud turning a profit is a good thing, and makes sense. But cloud is also a super competitive market - not so for Search or Ads. Those two feel like the places Google can rely on money coming from - revenue falling for those is worrying!
I would question just how competitive cloud is. Companies with banks worth of cash and an existing army of technical knowhow are few and far between. The only companies that could enter the market right now are facebook and Apple.
Ad spend globally may be down; can a comparison be made to competitors' ad revenue to come up with a baseline there?
Youtube was a large contributor to growth in 2021-2022, and that engine appears to have slowed. (Not just the "Youtube ads" line that is separated out.)
Most likely the market is reacting to these results not being any worse. Cloud gains were already priced into the stock, in my opinion.
"Cloud" for the purposes of financial reporting also includes the consumer cloud services workspace/gsuite/gdocs or whatever they're calling it now, right? not just the stuff at cloud.google.com
From the report: "Google Cloud includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Google Cloud generates revenues from fees received for Google Cloud Platform services, Google Workspace communication and collaboration tools, and other enterprise services."
> - unallocated corporate losses are 3B higher YoY
$2.5 billion of that is charges related to the layoffs.
> - all their expenses are way up (cost of revenue 1B up, R&D expenses 2.3 B up, sales and marketing costs ~0.7 B up)
Likewise half of this (i.e. you're double counting). See the table on page 3.
> - ad revenue is down (that's 80-90% of all of their revenue)
78% is not 80-90%. It's impressive that you managed to quote a ridiculously large range, and still get it wrong, in a discussiong about the earnings report.
The ad revenue from Google properties, not from the display ad network, is up.
> I couldn't care less to calculate it this time. It fluctuates around the same number YoY
Uh-huh. It was 77% in Q4, 79% in Q3, 80% in Q2. It has not been 90% for a decade.
> And that somehow makes it less of an ad revenue? Or different? Or something?
So you weren't making any kind of point when saying that ad revenue was down? If that's the case, I'm happy to also pretend that I'm also a member of the non sequitur club.
And since there are no details what is included on Cloud, number of new customers, example of large accounts that moved to Cloud, or info how much is Workspaces versus Enterprise Cloud customers...the moment those details leak, or if this is shown to be financial reporting engineering, the market will turn very sower, very quickly.