Q3 2020 Alphabet Inc Earnings Call
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I'd now like to hand, the conference over to your Speaker today, Jim Friedland Director of Investor Relations. Please go ahead.
Thank you good afternoon, everyone and welcome to alphabet <unk> third quarter 2020 earnings conference call with US today are Sundar Pichai and Ruth Porat.
Now I'll quickly cover the safe Harbor.
Some of the statements that we make today regarding our business operations and financial performance, including the effect of the COVID-19 pandemic on those areas may be considered forward looking and such statements involve a number of risks and uncertainties that could cause actual results to differ materially for.
For more information please refer to the risk factors discussed in our most recent form 10-K filed with the FCC and in our form 10-Q for the quarter ended September Thirtyth 2020 expected to be filed with the FCC later today.
During this call we will present, both GAAP and non-GAAP financial measures a reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at APC got X Y Z slash investor given.
In a busy schedule. This afternoon, we've shortened our opening remarks, so that we can move more quickly to take your questions and now I'll turn the call over to Sundar.
Thank you Jim and good afternoon, everyone. Thanks.
Thanks for joining us today.
This quarter, our performance was consistent with the broader online enrollment also.
Oh for Testament to the investment we've made to improve search and deliver a highly relevant experience that people turn to for help in moments big and small b.
We saw an improvement in advertiser spend across all geographies and most of 'em verticals.
With the word accelerating its transition to online and digital services. In Q3, we also saw strength in Google Cloud play and you tube subscriptions.
The third quarter, we are reporting earnings getting to COVID-19 pandemic.
Access to information has never been more important.
This year, including this quarter showed how valuable glue founding product search has been to people I.
And importantly, our product fund investments are making a real difference as businesses work direct color and get back on their feet wet.
Whether it's finding the latest information on COVID-19 cases in their area, which local businesses I'll open or what online courses will help them prepare for new jobs people continue to turn to Google search.
You can now find useful information about offerings like no contact at Liberty or curbside pickup for 2 million businesses on search and Matt.
And we have used googles duplex AI technology to make calls to businesses and couldn't from things like temporary closures. This.
This has enabled us to make threemillion updates to business information globally.
We know that People's expectations for instant perfect searches are high.
That's why we continue to invest deeply name <unk> and other technologies to ensure the most helpful search experience possible.
Two weeks ago, we announced a number of search improvements, including our biggest advancement in our spelling systems in over a decade.
A new approach to identifying key moments and videos.
On one off People's favorites, Hum to surge, which will identify a song an artist based on the on humming.
We also announced that book a huge breakthrough in natural language understanding that we introduced last year now we improved through those for almost every English search query.
We are also investing in improving the shopping experience in search to.
To help people find the best products and prices available from a wide range of merchants.
We recently added easy to see price comparisons to help consumers know if they're getting a good deal.
<unk> improved features like price tracking so people can request an alert if there's a discount on a product they are following.
These investments are also benefiting merchants and advertises and helping them recover.
As of today March and scandalous products for free on a shopping tab in 48 countries around the world.
For advertisers, we recently announced a new insights paid and Google ads to help businesses better understand consumer trends.
And track current search demand for products or services.
They don't say investing to create improved search experiences that provide additional value to news publishers.
We recently committed $1 billion and investments that include licensing content from National Regional and local news publishers for Google News showcased a new product that features the editorial curation of award winning you know stones.
We have signed partnerships with nearly 200 publications around the world with more to come.
We know our success in search is not guaranteed.
We are proud that people choose Google search not because they have to but because it's helpful.
We remain committed to investing to build a most helpful. Most trusted search experience just we have for the last 22 years.
On that note regarding the deal just lawsuit we believe that our products are creating significant consumer benefits and low confidently make our case, our companys focus remains on continuing our work to build a search product that people love and value.
Moving on to other parts of our business this quarter.
In hardware you highlighted some great products available for the holidays.
Our new pixel phones to bring together the very best of Googles hardware software in AI at an affordable price with new camera and assistant features.
And our latest Chromecast now consider school TV, which brings together more we shows and life TV from across apps and subscriptions and organizes them for you.
We're pleased with the positive reviews, we have a terrific product road map ahead.
Onto you tube people.
People come to you tube for entertainment information and opportunities to learn something new.
As a sign of the times useful guided meditation video set up 40% since mid March.
While DIY face mask tutorials have been viewed over 1 billion times.
You tube subscriptions also continued to grow.
You tube now have solar 30 million music and premium paid subscribers and over 35 million, including those on free trials.
Your TV now has more than 3 million paid subscribers.
Next cloud suite.
Three trends are driving the continued momentum of our cloud business first that's the shift to digital accelerates Google Cloud continues to provide a foundation for data processing and analytics one of the fastest growing segments of the market.
Liquidity, which provides real time and predictive analytics is vending retailers like best buy.
Helping them create better experiences for shoppers.
Customers value, our differentiated AI ammo based industry specific solutions.
This is leading to significant events that brands like Unilever Anvil and reckitt monkeys.
Additionally, we are working with government agencies like the U.S. Navy Tomorrow, nice maintenance operations for vessels and facilities.
We're also partnering with the defense innovation unit part of the U.S. Department of defense to help military doctors with cancer detection research.
And recently, we signed an enterprise agreement with the US Department of energy to help scale research efforts and innovate across national Labs and field sites.
Second customers are increasingly moving to the cloud to drive efficiencies and lower I'd costs.
Strength in multi cloud is an advantage for you here.
This is helping us win large data center and I'd transformation deals like Nokia, which recently announced its migrating and modernizing approximately 30 data centers across 12 countries onto Google cloud.
And third the future before it's creating a more collaborative low.
Customers are looking to sell support hybrid work environments, and we are seeing significant growth in demand.
This month, we announced Google took space, which brings together all of our communication and collaboration ABS and ensure they work better together.
This is helping organizations like the state of West, Virginia, and shipping Company Ocean Network Express improved collaboration productivity for their employees.
Google Workspace continues to grow for example, Google made saw peak in Q3 of 235 million daily meeting participants and more than 7.5 billion daily video called minutes.
Finally in our other bets.
They might announced that its fully autonomous ride hailing service and suburban Phoenix will open to the public making it the only company to offer a fully autonomous service for riders.
I am also entered into a strategic global partnership with Daimler trucks to enable fully autonomous truck.
Before I close I want to reiterate our four key areas of focus which you've heard me talk about all year.
First creating the most helpful product for everyone.
Our investments in search maps and shopping that I discussed earlier as well as Youtube are prime examples.
Second providing the most trusted experiences for our users.
We continue to work hard to keep use a safe and put them in control of that information.
Everyday she made blocks more than 100 million phishing attempts and Google play protect scan. So were 100 billion apps for malware and other issues.
Third executing at scale productively securely and collaboratively.
And finally, creating sustainable value, which means creating financially viable and self sustaining products.
Before I hand over to wrote one important update.
Starting with the results for the fourth quarter of 2020 will break our Google cloud as a separate reporting segment and.
I'm working with Roche and Thomas Korean to make investment decisions to drive progress here.
We have told you on these calls given the progress we are making and the opportunity for Google cloud in this growing global market.
We continue to invest aggressively to build our go to market capabilities.
Execute against our product roadmap and extend the global footprint of our infrastructure.
But the segmentation you will additionally seat information about the scale of our investments that should help you gauge the progress we're making on the multiyear path ahead to create sustainable value.
Thanks to all the Googlers around the world for everything you're doing to help our users and partners I hope everyone stay safe and let me reiterate my gratitude essential workers healthcare providers first responders teachers and scientists everywhere, but that I will now turn it over to <unk>.
Thank you Sundar, we're very pleased by our results in the third quarter, which reflect both broad based increases an advertiser spending search and you too as well as ongoing strength in our non advertising revenue line in particular, Google cloud and play.
Starting with consolidated alphabet results, our total revenues in the quarter or 46.2 billion up 14% year on year and up 15%.
Constant currency.
Total cost of revenues was 21.1 billion up 20% year on year, primarily driven by other cost of revenue, which was $13 billion up 29% year over year. So.
The biggest factors here again, this quarter or costs associated with our data centers and other operations, including depreciation.
Content acquisition costs, primarily driven by cost for you to advertising supported content followed by cost for subscription service content.
Operating expenses were $13.8 billion up 1% year on year, reflecting both the impact of the actions taken earlier in the year as a result of Cove, it as well as lapping a 554 million dollar legal settlement in the third quarter of 2000.
In terms of the three component parts.
<unk> op ex.
First the deceleration in R&D growth was due primarily to slower head count.
Second the year on year decline in sales and marketing expenses reflects the planned reduction in advertising and promotional spend that we implemented toward the end of the first quarter.
Third DNA growth reflects the lapping of the settlement all.
All three categories benefited from lower Kenny expenses due to cope with it.
Headcount was up 4623 from the second quarter.
Again, the majority of new hires were engineers and product managers.
In terms of product areas, the most sizable headcount increases or again and Google cloud for both technical and sales well.
Operating income was 11.2 billion up 22% year over here and our operating margin in the quarter with 24%.
Other income and expense was $2.1 billion, which primarily reflects unrealized gains in the value of investments in equity securities.
Net income was 11.2 billion operating cash flow was 17 billion with free cash flow of 11.6 billion in the quarter and 34 billion and the trailing 12 months. We ended the third quarter with 133 billion in cash and marketable security.
Let me now turn to our segment financial results.
Starting with our Google segment.
Total Google revenues were 46 billion up 14% year over here.
Google search and other advertising revenues were 26.3 billion in the quarter up 6% year over year as advertiser spend began to pick up in August.
You too the advertising revenues were 5 billion up 32% year on year, driven by ongoing substantial growth in direct response, followed by a rebound in brand advertising and increased spending by advertisers.
Network advertising revenues were 5.7 billion up 9% year on year.
Turning to Google cloud, including TCP, and Google Workspace, which was previously known as the G. Suite revenues were 3.4 billion for the third quarter up 45% year over here.
GCP maintains a very strong level of revenue growth it delivered in the second quarter and its revenue growth rate was again meaningfully above cloud overall.
Google Workspace revenues was driven by seat growth followed by growth in average revenue per seat.
Other revenues were 5.5 billion up 35% year over year, primarily driven by growth in play on you tube non advertising revenues.
We then clay AAP revenues in the third quarter benefited primarily from an increase in the number of active buyers as well as increased spend per buyer.
Within you tubes subscription revenue, we continued to benefit from subscriber growth.
Across its various offerings Google.
<unk> operating income was $12.6 billion up 17% versus last year and the operating margin was 27%.
As to our other bets revenues in the third quarter were 178 million the operating loss was 1.1 billion.
Let me end with our outlook regarding revenues in the third quarter, we benefited from a broad based improvement in advertiser spend across all geography on nearly all vertical this.
This is reflected in both search results as well as the rebound in brand advertising spend on you too.
While we're pleased with our performance in the third quarter, there's obviously uncertainty in the external environment.
In terms of Google Cloud, we're pleased with the consistent strong revenue growth that you saw again this quarter, reflecting the extraordinary secular trend under way.
And with respect to other revenues the primary driver of growth with play where revenue growth reflected elevated engagement during the pandemic on top of strong underlying growth.
There are signs that user behavior is beginning to return to normalized levels.
Moving on to profitability, we're pleased with the improvement in profitability versus the prior quarter, reflecting both the revenue performance versus Q team as well as the tactical adjustments, we made to slow down certain categories of spend in response to cope with it and.
In particular, the deceleration in headcount growth. This quarter reflects the actions we took at the outset of the pandemic to focus hiring on our highest priority areas like Google cloud.
Excluding the impact of closing the pending fit that acquisition, we expect a moderate further deceleration in the pace of head count growth in the fourth quarter.
We also saw the impact of steps, we took to slow down some categories of marketing spend in the third quarter sales and marketing expenses declined year on year, primarily due to a planned slowdown in ads in parallel we expect a more moderated year on year decline in sales and marketing in the fourth quarter as we incur.
Cree spend sequentially to support product launches and the holiday season.
Turning to Capex once again this quarter, we had a year on year decline in investments, primarily due to a reduced pace and real estate acquisitions, which we implemented at the outset of the pandemic server.
Service continued to be the largest driver of investment in the third quarter, followed by data centers.
Our cap ex outlook for the full year has not changed as we continue to expect a modest decrease in 2020 compared with last year.
Looking ahead, we remain focused on making the right investments to support growth as Sundar said in his opening comments, we continue to invest where we see the potential to create long term sustainable financial value, including investing aggressively to support growth in cloud. In addition, given the acceleration and digital.
And we're focused on ensuring that we remain well positioned to deliver for users and advertisers in this evolving environment.
Thank you send her and I will now take your questions.
Thank you as a reminder to ask a question you need to press Star then one on your telephone to withdraw your question. Please press the pound key to prevent any background noise. We ask that you. Please mute your line. Once your question has been stated.
And our first question comes from Eric Sheridan from E. B S. Your line is now open.
Push it maybe it is too soon or on a high level.
Called out some of the innovation, you're aiming for the medium to long term with respect to Serge could you take a step back and maybe give us your sense of how churches couldn't were both from a product. It is today, where there's a lot of the input by the user to through the Bush dynamic with the discovery of feed in discovery adds to that could drive both engage with the monetization across your.
Platform and the second part of the question was it seems like you're taking a little bit of a different tactic with your hardware shredded cheese. This year, there was a bit less albeit it was more on the mid to low written to the place where you joke hardware hardware.
Hardware and bought the time he is just to do a hard we're shrouded Gi fit broadly similar into your view core search is going for the medium to long term. Thanks, so much.
Oh, Thanks, very good questions on search you're right you know today, particularly with mobile and ambient computing, but as you know you having access to computing across other form factors.
I think information book you go looking for them that our times you know it's important that you have relevant information at your fingertips. So you know I do think about it as a holistic a.
User journey, and obviously you know in search will continue to evolve our discover has been very good in terms of discover and you tube. Both play a role in making sure you know people are getting relevant information and and I think for US it's important holistically.
A meeting uses information needs and out of which you know the monetization opportunity also works as well. So long. This is why you know be it or just color or be it.
You know.
How we pick up on you tube you know all of that matters for us.
On your second question on a hardware Oh, I'm I'm I'm excited about the you.
You know that we are doing some deeper investments in hardware, which which are some of it takes two to three years to come together and some of it you know excited at a terrific Road map ahead I.
I think we have definitely shown but pixels for a mix of five a clear value proposition and we'll we'll build on that you know our portfolio. You know, we're partly thinking about what are the important form factors.
Which matters and you know we do think about it with the view of fair search an assistant will be important as well. So in many ways hardware is there to strategically.
Benefit both how we guide the Android ecosystem, how do we make sure information is right that it uses fingertips. So those are both strategic views, we take into it as well, but I'm excited about the roadmap ahead and next year, you will see us a lean more into a you know.
Some of our deeper investments will come into play there.
Thank you and our next question comes from Doug Anmuth from JP Morgan. Your line is now open.
Thanks for taking the question Ruth we appreciate the incremental color on Threeq and Fourq you expenses.
Just hoping you could help us understand the cost structure, a little bit more kind of as we're coming out of this and just whether you're anticipating any more notable changes.
He's coming out of them and get them out of the pandemic kind of around the sustainability of the margin improvement that you saw in this quarter. Thanks, I think that attack so.
As I said as a result of coal that we did make tactical adjustments to slow the pace of spend in certain categories and that you know that started late in the first quarter and in part that's what you see here plus the impact from the improvement and revenue performance and.
We do remain focused on optimizing efficiency, where we can we said that on many prior calls but as we've also discussed with you on prior calls with us and I know that say, we are committed to making the right investments to support long term profitable growth and.
Yeah, I think what's exciting in this environment there appears to be an acceleration in digital transformation that underscores the importance of the products and services that we provide and the longer term opportunity. So we will continue to invest to best position us for the long term opportunity and obvious example is cloud are we doing.
Tend to maintain a high level of investment given the opportunity we see a that includes the ongoing increases and our go to market organization, our engineering organization as well as the investments that support you know the necessary capex. So hopefully that gives you a bit more color there.
Thank you.
Thank you and our next question comes from Heather Bellini from Goldman Sachs. Your line is now open.
Great. Thank you very much for taking the question Sundar I had a question for you just Thomas has been ahead of Google Cloud now for around two years, if I remember correctly I'm just wondering what do you see as the biggest change is he's put into place that has allowed the business to start gaining what appears to be materially more share and.
You look ahead to 2021, and what's going on with digital transformation, what would you say its top strategic priorities would be thank you.
Thanks, Heather you know a couple of things stand out for me I think it's been.
A very consistent focus strategy. So the focus on the five major geographies of the four customer segments and the fixed priority industries healthcare retail financial services media and entertainment manufacturing in public sector.
That focus and going deeper and.
And scaling our go to market both in terms of our people our partner a partner. So I think that's been a key.
The second thing I would say is some of the key differentiators that are playing out, particularly s., we have taken them deeper us unique industry solutions, so going deeper in having solutions and then some some of those cases, where we are now.
Pricing based on value I think that kind of deep deep deep or play something I'm very excited about definitely have strength and you know just based on our ongoing technology. So we do have differentiation in areas like.
Data analytics, AI et cetera, So that's been that's been a huge as well but.
But I'm pleased with the execution, obviously in this and as you know there is a time lag between when you hire the sales and then when we train and venue enabled them to be more productive and that's the investments or if there's been talking about and I can see it ramping or they can see the results come into play so credit credit credit do it's that focus.
And execution and so looking forward to the next phase.
Great. Thanks.
Thanks for covering and best wishes <unk>. Thank you.
Thank you and our next question comes from Brian Nowak from Morgan Stanley. Your line is now open.
Thanks for taking my question. So I wanted to ask one about E. Commerce, specifically you know it it seems to become increasingly competitive within the E. Commerce funnel. So maybe talk to us about one what types of consumer behavior changes are you seeing within E. Commerce search on the platform and then in your mind what are the key priorities of investing.
Then you need to really execute on to ensure you stay at the top of the funnel within E commerce. Thanks.
You know I think thinks that a standard for Stifel. You know I'm excited that you know to the set of.
No announcements and progress we have had in the last few months and obviously are you really focused on the user experience and we want to make sure as a consumer your wide comprehensive high quality.
Inventory and offerings and experience on the platform our free shopping listings, which we launched in the U.S. is now available in 48 countries around the world.
Additionally, we eliminated a commission fees so for the buy on Google Checkout option open the platform up to you know paypower shopify for for integration to swallow so.
That gives rise to comprehensiveness and be a focused on quality there.
In terms of the funnel and behavior.
To me what's interesting is you know obviously search captures the intent at the moment and the breadth of search I think has been has been a real asset and.
You know both you ask uses adopt a advertisers had I do so you can see that see that dynamic play in real time, but you do see a you know I I would say you tube is an important platform for E commerce as well I can see advertisers and you too, but the mid funnel level or even kind people that's not the intent at that moment in time.
To create demand create interest and so on so for US we see commerce working across the platform and I think that's an opportunity and a and then making sure. The rest of the experience is good for users is something we are deeply focused on.
Thanks Hunter.
Thank you and our next question comes from Brent Thill from Jefferies. Your line is now open.
Hi, Good afternoon, Ruth you called out a brand advertisers coming back to you too I'm just curious if you could give us a sense of.
Where you're seeing that strength on kind of where are you out relative to pre covered levels with with those advertisers.
So overall, we're pleased at the degree to which advertisers really have reactivated their budgets and this in the third quarter, you know it and they're reacting in part two I think evidence that consumers are showing strong demand across nearly all verticals you know, it's everything from home and garden to computer to work.
From home and.
So yeah very helpful. There and then you to strong watch time growth enables advertisers to reach audience that they can't reach on TV as we've often talked about and so they are increasingly looking to us to help them reach people, who are going to get you to to learn new topics and engage with fresh entertaining contact.
That you know that great great unique content, they satellites itself, but an opportunity or place testing the performance in the third quarter.
Thank you.
Thank you and our next question comes from the line of Justin Post from Bank of America. Your line is now open.
Great. Thank you so much maybe one for Sundar one for Ruth Sundar. Thanks for the update on the deal Jay as you think about all the regulators all over the world is or is there any hope of coming to a middle ground here.
How are you thinking about how far apart you guys are in different regions and then and then maybe for Ruth I'm on the you tube opportunity.
If you assume about 2 billion users you're on a run rate of maybe $10 per user I was just wondering how you how you're thinking about the monetization are you still very early and if you can give us any help on what the margins might look like thank you.
Ah why don't you go ahead.
So outlook in in terms of you to as I said, we are pleased with.
The ongoing momentum that you see in the revenue line I think as we've talked to you about quite frequently in our AD supported business within your two we do pay out a majority of revenues to all of our content creators, we pay all of the infrastructure and networking cost. That's you know for storing preserving video or otherwise for running it.
Two of them that includes marketing supporting content creators that you know there's quite a bit more that we think is invaluable for creators and the overall ecosystem to make sure were creating not only great experiences for free users and creators, but really the right overall ecosystem and we've talked about that in the car.
Text of how we invest to protect.
Hum protect the content that people are are are saying content moderation investments, we view as really an invaluable part of what we're doing and critically important so were continuing to to support that do you get the experience that both creators and end users have is just.
Really differentiated as a result, and then on the subscription side, we're continuing to build it out as some center noted in his opening comments. Both you tube music premium and you TV do you have a higher content acquisition costs as a percentage of revenues then you two ads and we aren't really they're continuing to build out that subscriber base.
And Justin on the regulatory front, you know scrutiny is not new for us and in some ways, it's now sector wide and not surprisingly so.
You know, we we will engage constructively, a very possible and and you know SP have shown through some of the past cases, you know went there as well we are confident about the benefits we bring to our users will make our case, where there is feedback or ruling.
Things you know, we'll we'll we'll be flexible and adapt and and so we are building back into it.
I think why do this a lot on the legislative and regulatory front you know some of this gets resolved. It also creates opportunity and in some cases, a cloud of deal opportunities as well and so you know and so that's the framework with the tree up approach. It then you know, we'll take long term here towards it and but at the end of the day, what's in our country.
Uhm and work space that we do intend to maintain a high level of investment to best position ourselves and I you know I kinda went through some of those items that they go to market team the engineering team and Capex and so we describe this as a multiyear path because we do believe we're still early in this journey.
Mm mm mobs and discover it's just you know getting I think I spoke a little bit earlier about thinking it through more Holistically. An example, where we worked well as you know as as Devil a person were looking to promote apps without a universal app campaigns, you could really reach across.
And and you know it's it's a good model to think about recently for example to serve small and medium businesses. The expanded smart campaigns to 150 countries and if you're a small business owner you can set up your first campaign create your first out in 15 minutes from the from your mobile device. So for me you know.
Thinking about these surfaces as you know, we'll do the hard work to make sure. The most relevant information gets in and thinking about it more holistically and and I think it gives us a chance to also engaged users and the way they want us to sometimes when they come looking for it and sometimes Sunday proactively wanted information given to them and so.
<unk>, that's the overall view and I think the opportunities very exciting.
Okay. Thank you very much.
Thank you and our next question comes from the line and Salmon from BMO capital markets. Your line is now open.
Great. Thanks, and good afternoon, everyone Sundararajan, whose response to the G. O J at once you can walk through that compared your search partnerships to help cereal brand my pay a supermarket to be at the end of the roller at eye level.
We've also heard a few options or talk about your addressable market being essentially twice as large as come in reviewed and maybe that includes things like those those payments inside supermarkets. So.
My question is two part firstly is it fair to tie those two types of comments together and assume that they are related to each other and then second could you maybe talk about how that might matter to your bigger picture thinking about the advertising and commerce opportunity for Google and in particular, the the competitive environment in your face.
Got that in a at a high level you know stepping back from it. All you know we are our mission is to provide information for the comprehensive environmental he faces.
Particularly with mogul and usually they're looking for information there's so many choices they have.
So the question is you know, making sure Google is irrelevant way by which they get that information and you can imagine when people are looking to buy products or the comedy does that exist travel booking hotels are any category, you take and and so for US you know that's why.
About holistically competing and making sure. We can provide relevant information is both Ah Ah Ah Ah you know competition be faithful mine Shannon that's the opportunity we have ahead.
In terms of specifics of the D O J case and stuff and you know I'm confident you know we have approached everything board with a view of making sure. We created the best user experience and B B really want you know we've always built Google for everyone. So we want it to be available on all platforms and be can.
[noise] lenient for users to access our services and and as part of that partner with other companies in doing so and so you know look forward to making our case there, but it's definitely early days and you know we are still reviewing an understanding understanding at all and I'm sure we'll update more Ah.
Time goes by.
Okay. Thank you.
Thank you and our next question comes from the line of Khan Sebastian from Bird. Your line is now open.
Thanks have a couple of here as well maybe just a follow up on the shopping questions specifically on Youtube. If you could expand on the role that shopping and shopping ads are now playing in the growth strategy, there and on Google work space. It seemed like this is a unique opportunity would work from home to really drive adoption of monetization.
Of the services, including needs as well as bundling with cloud services. So I wonder if you could provide any more detail on the on levels of usage and engagement you see with those applications and and how you plan to monetize those going forward. Thank you.
Great you know on shopping on Youtube you know definitely say, we had on the earlier part of the journey, but you know we have seen the strength and your T. Four direct response in on on a few other categories and I think I think the experience B C. There I think can directly carry on.
Or to Commerce and asked me Buildout experience, so I see that as an opportunity I earlier also mentioned about you know while searches currently capturing the intent at that given time Youtube advertisers can take a longer term view Ah you know create brand awareness create interest in and and and so on so that also offers.
You know opportunity. So we today in many many categories have creators with very compelling content and I've always felt things work well, if you match us interest and and it's very relevant to users and so I think commerce, there's a lot of commercial activity on Youtube organically.
And so I I see it as a long term opportunity.
On Google work space you know.
Very excited at the you know it you know we both have strong growth you know I mentioned meet metrics Ah earlier that we saw a peak of 235 million daily meeting participants in Q3 and more than 70 that happening in daily video called minutes definitely significant grow to me to ask for less.
Or other.
Other products like dogs drive in chat, but they will work space also now creates that unified expedience and and you know I think we are definitely seeing a lot of interest and and you know demand. There I do think coldest really acts rating the future of work.
And and many of the trends. There are you know will will last through time and I didn't give us all of us a chance to re imagine this ah well imagine what this collaboration and productivity at scale, including people working remotely looks like and you know be plan to be at the forefront of it and some excited.
For the opportunity there.
Great. Thank you.
Thank you and then final question comes from the line of Ross Sandler from Barclays. Your line is now often.
Hi, just two questions if we look at search.
Your growth rates in January and February compared to today, so pre covid versus today I guess, how many categories are above the gym sub growth rate is travel the only large category at this stage. That's running below you know you're pretty Covid groceries and search and then the second question was.
[noise].
On the topic of the Apple Sushi agreement. So does he go sit in your blog posts.
Based on other agreements were were you seen things change hands, you didn't really lose alone inquiry volume after the change so what do you think the recapture reed of queries.
On Safari toolbar would be if if that deal where to change hands and it was just really a code red situation or is it something that we should be able to manage through it takes a lot [laughter].
In terms of your first question you know until you've often said when you have a very diverse business globally and that's across sectors customer sized geographies.
You know with respect at sectors, we saw broadbased improvement across virtually all basically narrows Mears what you see in the broader economy and we we don't break out when that that it was quite.
[noise] broadbased.
In terms of your ears, you know second question Saturday, you I'll take that.
On you know on on search you know as I said, you know for for a long time, we we work hard to make sure. He gives us can conveniently access most of her partner's choose us because we are the the best search provider uses find us having the highest search quality and and so there's organic day.
[noise] man for it and we believe in investing in our experience across all our platforms and so we are definitely committed to making.
Making sure we can serve our uses everywhere and and we are really focused on it.
Thank you and that concludes that question and answer session I'd like to turn the conference back over to Jim freelance for any closing remarks.
Thanks, everyone for joining us today, we know you all have a busy evening, we look forward to speaking with you again on her fourth quarter Twenty-twenty call. Thank you and have a good evening.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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