Please ensure Javascript is enabled for purposes of website accessibility

Google Was Forced Into Disclosing YouTube Revenue by SEC

By Donna Fuscaldo - Mar 16, 2020 at 3:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When Google's parent revealed YouTube revenue for the first time during the fourth quarter the motivation had less to do with transparency and more to do with appeasing a regulator.

Alphabet's (GOOG 5.20%) (GOOGL 5.11%) Google surprised investors when it reported YouTube revenue for the first time in conjunction with its fourth-quarter earnings. 

But investors applauding its increased transparency can be excused if they feel a little duped. Turns out Google was asked to do so by the Securities and Exchange Commission, which requested Google's parent offer up more "quantitative and qualitative" information on its business units

Google Apps

IMAGE SOURCE: GETTY IMAGES.

In filings with the SEC

Alphabet disclosed Chief Accounting Officer Amie Thuener O'Toole told the SEC the Internet giant would break out YouTube revenue despite no changes to its ad business. The SEC' requested more information about Alphabet's key businesses when reporting quarterly earnings. To appease regulators Thuener O'Toole told the SEC Alphabet would also provide revenue for its cloud unit, even though it's not required to do so. The executive noted it wasn't providing ad revenue based on mobile and desktop since it doesn't sell advertisements by the type of device. 

YouTube had annual ad revenue of $15 billion in 2019. Meanwhile, Google Cloud revenue was $8.92 billion, up 53% year-over-year. The unit completed 2019 with a more than $10 billion revenue run rate

The revelation about why Alphabet broke out YouTube revenue comes amid other controversy surrounding YouTube. Last week the search giant walked back its ban on ads appearing alongside any videos that mention coronavirus. "It's becoming clear this issue is now an ongoing and important part of everyday conversation, and we want to make sure news organizations and creators can continue producing quality videos in a sustainable way," wrote YouTube CEO Susan Wojcicki in a blog.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,359.50 (5.11%) $114.66
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,370.76 (5.20%) $117.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.