Google’s public cloud has been chasing competing services from Amazon and Microsoft for so long, you might think it would be getting winded. But the critical Alphabet division keeps on keeping on, yesterday reporting revenues of more than $5.5 billion for the fourth quarter. That was the good news. The bad news was that Google Cloud accrued operating losses worth $890 million at the same time.
It may be hard to understand how a business with a run rate greater than $22 billion is losing money, but chief financial officer Ruth Porate explained it in the earnings call with analysts. It basically comes down to spending money to make money, while also competing with its much more successful rivals. (She refers to Google Cloud as simply Cloud here.)
“While Cloud operating loss and operating margin improved in 2021, we plan to continue to invest aggressively in …
