Investing.com – Alphabet stock (NASDAQ:GOOGL) traded 0.7% lower in Wednesday’s premarket owing to slower-than-expected growth at its YouTube and Cloud computing businesses in the third quarter.
YouTube, part of Google advertising, delivered $7.2 billion in revenue. More was expected from the division as most expected the pandemic-driven binge by consumers and advertisers to continue on the video streaming platform.
Apple’s anti-tracking app privacy features had a “modest impact on YouTube’s revenues” in the quarter, according to Chief Financial Officer Ruth Porat , Bloomberg reported.
The iPhone-maker updated its privacy policy in the second quarter to make it tougher for apps to track users and source their personal data for ad targeting. Users have to now opt-in to let an app track them, a turn-off for advertisers.
Sales from the company’s Cloud division rose 45% to $4.99 billion, missing Wall Street expectations of $5.04 billion. The company trails Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) in the big business. Analysts keep expectations from Cloud companies high given the shift to digital that the pandemic only accelerated. Any softness there isn’t well accepted.
Porat warned that sales from Google’s app store would suffer as a result of the reduction in commission this summer after pressure from regulators and software developers.
Google advertising revenue rose over 43% to $53.1 billion during the third quarter. Of this, Google search delivered about $38 billion in revenue and showed that spending by companies remains robust as consumers continue to look for products and services online while parts of the world remain affected by the pandemic.
Alphabet's overall sales jumped 41% to $65.1 billion and was ahead of estimated. So was the diluted profit per share of $27.99.