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Back in May, I described Google as a money-making, near-monopoly that is the gateway to the Internet, and you're nuts if you don't own their shares.
At that time, Google shares were down 16% year-to-date. Now they are down 27.9% year to date. Not a very good performance, but then everything in the sector has been off about as much in 2022.
As mentioned earlier, Google had third quarter results out after the bell last night, and they were a little disappointing. The stock price fell 6.6% after hours, which puts them back where they were trading in the middle of October.
Their search advertising business delivered decent revenue, but at lower margins than hoped. Advertising sales on YouTube were weak. The Google Cloud business did well.
Google is a really big company, making about $70 billion in revenue every quarter. That's $40 billion from selling adverts next to its search results, another $7 billion from ads on YouTube, $8 billion from ads served on other websites, and about $15 billion from Google Cloud and other services.
The company has a ton of cash on hand, over $160 billion, and is buying back stock aggressively. Repurchases for the quarter were $15.5 billion, bringing total year-to-date share buybacks to $44 billion. That's good for shareholders like us that are holding on.
We expect better advertising sales in 2023, provided that the US economy stays strong as inflation subsides.
