Google Must Shine More Light on its Cloud


Google is the world’s second-largest company by market value. But even for huge businesses, little things can count for a lot.

Google Cloud Platform isn’t really small. In fact, parent company


GOOGL 1.76%

says the division is now generating about $1 billion in revenue per quarter. That, however, is about 3% of what the core Google business reported for its most recent quarter. It also is notably smaller than

AWS segment, which is currently the largest provider of public cloud services. AWS saw revenue of $5.1 billion in the fourth quarter, up 45% year over year.

Still, Alphabet considers the Google Cloud Platform one of its biggest “bets”—on par with its efforts in branded hardware as well as YouTube. It is also a major force behind the parent company’s spending. Google Cloud Chief Executive

Diane Greene

said at a conference Tuesday that the division was “the largest driver of head count additions” at Alphabet last year, when the company added more than 8,000 full-time employees.

Outside of selective snippets, such as the mention of revenue two weeks ago on its earnings call, Google has kept the performance of its cloud business shrouded in mystery. Its operating results are lumped into a segment called “Google Other,” which generated revenue of $14.3 billion last year—up 42% from the year before. That includes cloud, Google’s devices and content purchased from the Google Play online store—hardly complementary businesses.

Google would benefit from shedding more light. Investors have dimmed on the stock of late, mostly on concerns about growing costs associated with the core advertising business. Amazon, meanwhile, has drawn high praise from investors since it first started making AWS results public in early 2015.

Brian Nowak


Morgan Stanley

estimates that Google’s cloud revenue more than doubled last year and will grow by 50% annually over the next two years.

Google may feel its cloud business is still not big enough to merit disclosure. But investors want to know more. And with growth under pressure in its advertising business, Google can use all the good news it can get.

Write to Dan Gallagher at

Appeared in the February 14, 2018, print edition as ‘Google’s Cloud Needs Light.’



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