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Despite its ongoing unsavory content problem, YouTube remains Google's advertising cash cow
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Despite its ongoing unsavory content problem, YouTube remains Google's advertising cash cow

Sundar Pichai

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Google CEO Sundar Pichai.

  • Recent reports may have suggested that YouTube's dominance in online video is eroding, but Google leadership quashed those claims during parent Alphabet's second-quarter earnings.
  • "YouTube revenue growth was strong in the first quarter, and again strong here in the second quarter," Alphabet's CFO Ruth Porat said during the company's earnings call.
  • YouTube's removing content has had "virtually no impact" on YouTube revenues, she said.
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Recent reports have suggested that YouTube's dominance in internet video is eroding, but Google leadership quashed those claims during parent company Alphabet's second-quarter earnings on Thursday.

The company stuck to its convention and didn't break out YouTube's revenues separately, but said that regulatory and advertiser scrutiny had not affected YouTube's earnings.

"YouTube revenue growth was strong in the first quarter, and again strong here in the second quarter," Google parent Alphabet's CFO Ruth Porat said during the company's earnings call. She said the video giant was the second largest driver of revenue growth across Alphabet.

Alphabet exceeded analyst expectations, reporting total revenues of $38.9 billion, up 19% year-on-year, driven by mobile search, YouTube and Cloud.

YouTube has come under fire from advertisers whose ads have repeatedly ended up next to unsavory content. It is also facing regulatory scrutiny, with the Justice Department opening up an investigation into Google's market power and the Federal Trade Commission reportedly considering asking YouTube to disable ads against kids content, Axios reported.

Google's core advertising business also bounced back. After a bad miss in the previous quarter, ad revenue grew over 19% from the same period the year prior, beating analysts' predictions of just over 15% growth. Porat attributed that to direct-reponse advertising becoming more key in recent quarters.

Google CEO Sundar Pichai also said that YouTube continues to be an important investment, having seen strong growth in several areas.

He said that creators were continuing to flock to YouTube, and that channels with more than 1 million subscribers had grown by 75% year on year. He also pointed out new monetization products like SuperChat, Channel Memberships and Merch, which he said had allowed "thousands of channels" to double their total monthly revenue.

He also said YouTube was building momentum with its subscription services - YouTube Music and YouTube Premium - which are now available in over 60 countries, up from five markets at the start of 2018.

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