Google suffers $1.2 billion Q4 operating loss in cloud business

Google Cloud suffered a $1.2 billion operating loss in the final quarter of 2020, four percent worse than a year earlier, to end the year with a $5.6 billion deficit for the full year, an increase of nearly 21 percent.

Overall, Google is doing fine, raking a net profit of $15.2 billion in the last quarter, up 43 percent on-year. Its revenues were nearly $$56.90, up 23 percent and surpassing the $53.13 billion forecast by analysts. Google stock jumped over 6 percent in after-hours trading.

The company's cloud business is seeing increased sales as losses mount. Its revenue topped $13 billion last year, up from nearly $9 billion in the prior year.

Google's earnings mainly come from its core search advertising business but have been working for years to diversify its revenue through cloud computing and various projects.

The cloud proved to be a huge profit driver for rival Amazon but fell short of expectations for Google.

Google's chief financial officer, Ruth Porat noted that the cloud business's operating loss reflects the organization being built ahead of revenue.

Google Cloud's success with large enterprises is through long-term commitment agreements. Earlier this week, Google announced a six-year strategic partnership with Ford, making it the carmaker's preferred cloud data storage provider.