Here’s How Major Tech Corporations Earn Their Money

The biggest companies in the world by market capitalization are almost all tech companies, and that often leads to them being grouped together in the same category of Big Tech. In spite of the fact that this is the case, each tech company has a slightly different revenue stream because of the fact that this is the sort of thing that could potentially end up helping them diversify. Truman Du recently put out some graphics that break down the revenue that is earned by each major tech corporation.

Starting off with Alphabet, almost three quarters of the revenue earned by this company or 72% to be precise came from search advertising. That makes sense since Google is the biggest search engine in the world, receiving upwards of 90% of the total search volume on the internet with all things having been considered and taken into account.

Alphabet brought in a total of $56.3 billion in search ad revenue in the second quarter of 2022. Around $40.7 billion came from Google, with a further $7.3 billion coming in from YouTube. Google AdMob was also a big source of revenue for the tech juggernaut, bringing in approximately $8.3 billion in a single quarter.

Google also brought in $6 billion apiece from the Google Play Store as well as Google Cloud, bringing their total revenue up to just under $70 billion or $69.7 billion to be precise. After taking out various expenses, Alphabet was left with over $16 billion in profit which is quite a healthy margin.

With all of that having been said and now out of the way, it is important to note that Amazon far outstrips Google in terms of quarterly revenue. The ecommerce giant brought in over $121 billion in revenue in the same period.

This revenue came from three different sources, with the vast majority coming in from the provision of their main products and services in North America. That brought in $74.4 billion, which alone surpasses Alphabet’s total revenue for the same quarter. However, ecommerce is so expensive that Amazon failed to turn a profit last quarter. Instead, the company suffered a loss in excess of two billion dollars.

Moving on to Apple, this trillion dollar company earned a total of $83 billion in revenue which came from two main sources. These two sources are device revenue as well as service revenue. Over $40 billion dollars came from the sale of iPhones alone. A further $7 billion each came from Mac sales and iPad sales, and the Apple Watch also performed well by bringing in $8 billion.

Apple Pay is the second biggest source of revenue for the company, bringing in just under $20 billion. After deducting business expenses, Apple is left with a solid $19.4 billion in net profit for the quarter.

Out of all of these tech companies, Microsoft seems to be the most diversified. Its revenue of $51.9 billion was split quite evenly between Microsoft 365, which brought in $16.6 billion, Windows OS which earned $14.4 billion and their biggest earner Azure which raked in $20.9 billion in revenue. While Microsoft’s total earnings are less than that of Alphabet, it earned almost the same level of profit namely $16.7 billion.

Microsoft has the second biggest cloud service provider in the world after AWS, and that has resulted in the company boosting its revenue by a large margin. As you can clearly see, each major tech company takes a different approach when it comes to earning money. Also, most of the billions that they earn go towards product development, marketing, taxes, as well as various operating expenses. Only Amazon failed to turn a profit which is likely because the ecommerce platform believes in pouring all resources into exponential growth.

H/T: Visualcapitalist

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