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Alphabet, Google's parent company, reported search revenue and profit margin for Q4 that did not meet Wall Street's expectations. The company's investment in artificial intelligence offset the growth in its flagship business and recent cost-cutting measures.
The internet giant recorded that revenue from its search engine, its largest unit, was $48 billion in the fourth quarter, up 13 percent but slightly lower than analysts' estimate of $48.1 billion. The company said that a measure of profitability, called an operating margin, was 27 percent in the fourth quarter, below the 28 percent that analysts were looking for.
Despite falling short in search revenue and profit margin, Alphabet reported a 13% increase in quarterly sales, exceeding analysts' estimates. The company has conducted layoffs in various departments while also going on a hiring spree during the pandemic.
At the end of 2019, the company's workforce totaled 119,000, before it went on a hiring spree during the pandemic, when it recorded surging usage of its online services. The company culled 12,000 workers from its payroll early last year.