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Google’s Cloud Business Continues to Grow as Its Investments Surge

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Feb. 5 2019, Published 11:22 a.m. ET

Google’s Other Revenue segment continues to see robust growth

While Google’s ad revenue continues to see solid growth, it’s slowing down. The company’s ad revenue rose 20% year-over-year in the fourth quarter, a slowdown from previous quarters. However, it continues to see robust growth in its fast-growing segments.

Google’s Other Revenue segment, which includes revenue from its fast-growing cloud, Play Store, and hardware businesses, generated revenue of $6.49 billion in the fourth quarter, up 30.1% from the same quarter last year.

Google’s Other Revenue segment beat Wall Street’s expectation of $6.43 billion. The segment makes up 16.5% of Alphabet’s (GOOGL) total revenue as of the fourth quarter.

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Google continues to pump money into its cloud business

As we mentioned in the previous article, Alphabet spent over $6 billion on research and development in the fourth quarter. A good chunk of this amount was spent on fast-growing technologies such as cloud and AI. These investments could pay rich dividends in the coming years.

Google’s cloud business still lags the likes of Amazon (AMZN) and Microsoft (MSFT). However, while the company didn’t disclose the total revenue it had received from its cloud business, it did say that cloud was one of its fastest-growing businesses.

Alphabet’s total head count surged in 2018. The company’s total number of employees at the end of 2018 came in at 98,771 compared to 80,110 at the end of 2017. The company’s head count mainly grew in Google’s cloud business.

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