Google earnings conference call record: AR will be used to simulate the shopping scene of physical stores; Cloud business investment continues to increase


Tencent technology news on July 28, Google parent company alphabet released its second quarter financial report as of June 30, 2021 on Tuesday. According to the financial report, the revenue of alphabet in the second quarter was US $61.88 billion, an increase of 62% over US $38.297 billion in the same period last year, and the market is expected to be US $56.03 billion; The net profit was US $18.525 billion, an increase of 166% over US $6.959 billion in the same period last year; Alpha’s second quarter earnings per share were $27.26, compared with $10.13 in the same period last year.
After the financial report was released, alphabet, Google CEO Sundar Pichai, alphabet, Google chief financial officer Ruth Porat, and Google CBO Philipp Schindler attended the financial report teleconference to interpret the key points of the financial report and answer the questions of analysts.
The following is the record of the earnings conference call:
Morgan Stanley analyst: for many years, Google has been using AI and other technologies to promote innovation, search and other businesses. What room can we use AI and other technologies to improve our products in the future? The second question is how to use some suggested measures to promote more retailers to move online?
Pichai: first of all, our core business area is “search”. We have opened the Bert business, which is our key development area and has made a lot of progress. Now information is constantly exploding. We also adopt a variety of modes to improve search technology, which is our key investment area. In addition, What we do is to ensure that computers can better understand audio and text, and enrich our products.
Schindler: we make sure that when people use Google, they can find the best products and the most competitive prices. Our market share has also increased. 2020 is a year to eliminate financial barriers, optimize commissions and other fees, and those who use Google advertising services saw the click through rate increase by 50% in the first quarter. In 2021, we will strive to eliminate integration barriers. Together with many partners, we will enable users to carry out business on multiple platforms of Google.
Once merchants start to cooperate with us, they can obtain a variety of values provided by the platform, better understand the performance rate and pricing model, and we can provide better customer service and products. We can also use AR to simulate the scene of shopping in physical stores. Users can try it before buying. This business is mainly carried out in beauty and other industries. We strive to create an open shopping experience. There are many opportunities in this aspect, which is also our focus in the future.
JPMorgan analyst: in the past few years, Google has been promoting its products to customers. What is the progress of enterprise customers in Google search advertising, Google cloud services and other products? How did they respond to these products? What are the dynamic changes in the cost structure before and after the epidemic?
Pichai: Generally speaking, it is a transformation to digitization. The specific form depends on the industry of customers. These enterprises regard alphabet as a digital partner. We provide customers with different solutions and are making good progress at present. As for the cloud service you mentioned, customers may choose cloud service because of the problem of supply chain security, or customers try to keep up with the transformation of digitization, make more investment in data analysis, or change to a more diversified labor force. If our customers are retailers, we can take advantage of Google’s expertise in advertising, which is the overall trend we see, covering a variety of business areas.
Paulat: with regard to the investment in the second half of the year, our focus is on how to promote short-term and long-term growth. A very important point is that the short-term cost does not change much, such as depreciation fees and operating expenses of the data center. The year-on-year growth in the second quarter is good, which not only shows the rapid growth of our revenue, but also shows that our cost has little change.
However, in the long run, our investment in services and cloud business will continue to increase. In addition, there will be an increase in the expenditure of marketing personnel. Due to the epidemic, the progress of some of our construction projects and facilities projects is very slow. At present, we are also glad that the construction of this part has resumed.
Bank of America analyst: the search business grew very well this quarter. Do some vertical areas or noteworthy products outperform the management’s expectations? When is the growth expected to continue? In terms of cloud services, the business profit growth is very good. What stage is the infrastructure of cloud services currently in? Will gross profit continue to grow?
Pichai: first of all, some of the infrastructure and technical foundation we carry on Google are common with the cloud, so there will be significant synergy in this regard.
Borat: at present, in the field of cloud business, our investment mode has not changed. We will continue to invest and continue to invest to strengthen the progress of global cloud business deployment. In India, we have built the second cloud data center cluster, which is our 26th cluster in the world. We see many opportunities, so we will continue to invest. At present, it is in the initial stage of the business, so it will not be explained quarterly. We will continue to invest and expand channels, computing power and products. We are very satisfied with the progress made so far.
Schindler: at present, retail business is the biggest contributor to our rapid year-on-year growth. In addition, tourism media services and entertainment also grow very strongly.
Is cloud security an important aspect of business growth? In terms of youtube, does it take advantage of the trend that users and advertising are constantly shifting from linear TV (traditional TV)? How are Google’s various related businesses integrated in this regard?

Pichai: security is indeed a very unique advantage of Google’s business. Google is also a leader in the industry. In the past few years, especially in the past few quarters, enterprises are very worried about some defects and weaknesses of the supply chain, so security has become an important consideration. Cyber threat is a problem that people are worried about, and there is a lot of discussion and attention on this issue. Google has a very strong product portfolio. We are also continuously strengthening the solution, so security will be an important advantage now and in the future.
Schindler: brands are growing very strongly on YouTube. The shift to online video and live broadcasting is an important trend at present. There are about more than 2 billion active users every month. I think we are also in the leading position in this trend. Businesses are also looking for opportunities other than traditional TV. On the one hand, we can help businesses reach more users. On the other hand, we can also help brands reach users more effectively. So you can see many advertisers reassess their media composition and improve their investment in our platform.
Direct effect advertising enables advertisers to directly translate their purchase intention into action. For example, video action compaign is our next-generation true view for action template. Advertisers can access all the inventory on Google platform on one template, and we can make YouTube more consumer.
We can not only help advertisers reach more users and realize brand building. It can also make more video viewers become potential buyers. More advertisers can use the platform to create demand, and use direct selling advertising to transform this demand into action.
The second question is YouTube TV advertising. Connected TV is our fastest growing user screen. This trend began before the epidemic and has been improved in the middle of the epidemic. Now is the first live broadcast platform, and we are very satisfied with the current progress.
Q & A is continuously updated