What's going on?

Google-parent company Alphabet pressed all investors� right buttons late on Tuesday: the tech giant posted better-than-expected earnings, and its stock initially jumped 6%.

What does this mean?

The pandemic�s been forcing us to spend more and more of our time and money online, and advertisers have followed suit: they�ve been spending big on ads across Google and YouTube, which make up the majority of Alphabet�s income. Add to that the jump in demand for its cloud business thanks to the surge in home-working, and it’s easy to see why its revenue topped analysts� forecasts. The company managed to keep its costs in check too, pushing its profit above expectations.

Why should I care?

Zooming in: Cloud�s got some way to go.�

Ads are Alphabet�s biggest revenue stream, sure, but investors are paying just as close attention to its fast-growing cloud business. Alphabet�s been investing in the segment for years in hopes of getting a slice of the $1 trillion industry, but the company hadn�t told investors how profitable it was until now. Or rather, how unprofitable it was: the segment posted a loss of over $1 billion last quarter, suggesting Alphabet has some way to go to catch up with front-runners Amazon and Microsoft�

Bigger picture: The regulatory walls are closing in.

To top it all, Australia just proposed a law that would force Big Tech to pay media outlets to show their content in their search feeds. And while Google only made around 2% of its revenue from the country in 2019 � low enough that it�s threatened to ditch Oz altogether � this is becoming a worrying pattern: the tech giant�s already paying for search feed content in France. Still, if Google thinks that�s bad, it ought to spare a thought for all the Aussies out there who might now have to go back to using Bing�