Google’s cloud business turns profitable for the first time on record

They got the profit after they changed the way losses are recorded though, not sure if it really shows improvement: "cloud unit had a $186 million operating loss in the fourth quarter, compared with $480 million before the change."

From the article:

> “Certain costs associated with corporate initiatives supporting consumer-facing activities, previously reflected in unallocated corporate costs, are now allocated to Google Services; and centrally-managed shared research and development activities, including our shared developer tools, are now allocated based on an updated measure of the relative benefit derived from the services,” Alphabet said in a filing.

> “As a result of these changes, more of the previously unallocated corporate costs are allocated to our segments, and more of certain previously allocated costs are allocated to our consumer-facing Google Services products and less to Google Cloud enterprise products.”

I guess the new tax rule on accounting of software developer salaries as amortized cost over 5 yrs is expected to positively impact profitability. Looks like they used this to also reallocate some central costs to various business units.

Operating income excludes the salaries of all the engineers working on new features etc, right?

Unrelated but does anyone pay sticker price for Google Cloud?

Not that long ago they were aggressive with price reductions to sign new accounts and were not hesitant to give free credits.