YouTube to launch commerce-related features first in India before global roll-out

Alphabet-owned video streaming service YouTube will launch its commerce-related features first in India before rolling them out globally, CEO Sundar Pichai told analysts during the Q4 2021 earnings conference call.

"When I look at YouTube in India, some of the commerce ideas we talked about earlier, you may see as first stride in India first because we can get quicker feedback, very dynamic, youthful population. And so we'll do it there and then roll it out globally. So we are constantly looking for opportunities like that," Pichai said.

Speaking about the company's strategy for the Indian market, Pichai said that the tech giant is looking to deepen its connection with the Indian market by ensuring that the internet is accessible to everyone.

"In general, we are trying to think deeper about these newer markets, both -- it really lines up with our mission of building a more equitable Internet for everyone. A couple of the things we have done recently. A year ago, we announced a $10 billion Google for India Digitization Fund. And it's a reflection of our confidence in the future of India, its digital economy, our desire to build products there, which we think will help us globally," he noted.

Alphabet Senior Vice President and Chief Business Officer Philipp Schindler said YouTube offers immense commerce opportunities to brands and buyers. "We're making it easier for viewers to buy what they see and simpler for advertisers to drive action with innovative solutions like product feeds and video action campaigns and emerging formats like live commerce," he noted.

Alphabet CFO Ruth Porat said that the company's consolidated revenues for Q4 were $75.3 billion, up 32%. The total cost of revenues was $33 billion, up 26%, primarily driven by other costs of revenues, which was $19.6 billion, up 25%. Operating expenses were $20.5 billion, up 35%.

"The biggest factors here were: first, content acquisition costs, primarily driven by costs for YouTube's advertising-supported content followed by costs for subscription content; second, hardware costs; and third, costs associated with data centers and other operations, including depreciation, which were offset in part by the impact of the change in useful lives made at the beginning of 2021," Porat said.

He also noted that the total Google Services revenues were $69.4 billion, up 31%. Further, Google Search and other advertising revenues of $43.3 billion in the quarter were up 36%, with broad-based strength across our business, led again by strong growth in retail.

YouTube advertising revenues of $8.6 billion were up 25%, reflecting strength in both direct response and brand advertising, he stated. The deceleration in the growth rate versus the third quarter of 2021 was driven primarily by lapping a strong recovery in brand in the fourth quarter of 2020.

Network advertising revenues of $9.3 billion were up 26%, driven by AdMob. Other revenues were $8.2 billion, up 22%, driven primarily by growth in hardware, which benefited from the successful launch of the Pixel 6 and Pixel 6 Pro as well as the addition of Fitbit revenues followed by YouTube nonadvertising revenues.

In terms of Google Services cost, Total Acquisition Costs (TAC) was $13.4 billion, up 28%. Google Services' operating income was $26 billion, up 36%.