Google Australia reports bumper year for 2020 as net profit jumps fivefold

Google Australia reports bumper year for 2020 as net profit jumps fivefold

Google Australia reports bumper year for 2020 as net profit jumps fivefold

Image: Getty Images

Google Australia has reported a bumper year for 2020, with indicators headed in the right direction for Alphabet’s south west Pacific outpost.

The company reported consolidated revenue of AU$1.4 billion compared to AU$1.24 billion the year prior, however it also revealed it had AU$5.2 billion in gross revenue pass through it before direct costs of sales was included, which was an improvement on 2019’s AU$4.8 billion.

Of the AU$5.2 billion, AU$4.4 billion was from “advertising reseller revenue”, an increase of around AU$300 million on last year.

Breaking down its consolidated revenue, Google Australia said advertising increased from AU$609 million to AU$681.7 million, reselling cloud services from its Singapore related entity produced AU$65 million in increased revenue to AU$175 million for the year to 31 December 2020, while hardware sales increased by AU$10 million to AU$189 million.

Service revenue suffered a rare drop, with revenue falling from AU$332.6 million to AU$329 million.

Payments to related entities under the Google and Alphabet umbrella for service fees rose from AU$3.45 billion to AU$3.8 billion.

Google Australia reported pre-tax profit of AU$238.5 million, up from AU$133.7 million, with net profit spiking from AU$34 million to AU$185.6 million.

One reason for the net profit jump was a significant drop in income tax expense, falling from AU$99.8 million last year to AU$53 million. In the year prior, Google was hit with a AU$51 million tax adjustment for years prior, while this year it received an adjustment benefit of AU$2 million. The company also had a AU$22 million deferred tax benefit compared to the AU$9.6 million benefit recorded last year.

In early January, Google Australia issued AU$310 million in shares to Google International, and did not issue a dividend this year.

The company said at the end of 2020, it had 1,878 employees, with wages jumping from AU$386 million to AU$462 million, and overall payments to employees growing from AU$453 million to AU$715 million.

Google Australia described its principal activities marketing and selling “certain internet search, advertising, and information management technology services and related products”, as well as providing marketing and sales support for search engine and advertising. It also said it conducts certain research for its corporate overlords, as well as generating revenue from hardware sales.

Recently, Android handsets in Australia have begun to try to get users to add their birthdays to their profile. While starting off with polite requests, the alerts have escalated to stating the birthday needs to be added to the profile to ensure Google complies with “the law”.


Android gets pushy

Screenshot: Chris Duckett/ZDNet

“This prompt is part of an effort to ensure that our users meet the age requirements for their Google Account,” the company said in response to being asked what laws it needs to comply with.

The company did not address how it treats accounts without birthday information.

Google Australia said in its 2020 financial report that it had considered any penalties from its recent court loss as a contingent liability, where an impact exists but is not recognised because it is unknown.

The Australian Federal Court found Google misled domestic consumers about the way it collected personal location data on Android mobile devices for almost two years.

Justice Thomas Thawley ruled Google had misrepresented the “location history” setting as being the only Google Account setting that affected whether Google collected, kept, or used personally identifiable data about their location when consumers first create an account.

Thawley said Google failed to disclose to consumers that another Google Account setting, titled “web and app activity”, also enabled Google to collect, store, and use personally identifiable location data when it was turned on. The “web and app activity” setting is, by default, turned on for Android devices.

In addition, Thawley found, from 9 March 2017 to 29 November 2018, consumers were not told by Google that the “web and app activity” setting on their Android device was relevant to the collection of personal location data.

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