From Alibaba to Amazon, the biggest names in tech and business are pitching in to fight COVID-19. On Friday, Google joined their ranks after the company's CEO Sundar Pichai announced an $800 million funding scheme in cash and advertising credits meant to help small businesses and raise awareness among the public.
This is the largest donation yet announced by a tech corporation. However, it should be noted that must of the funding is in the form of credits that grantees can spend on advertising on Google's platforms (AdWords, Adsense, YouTube).
For Google's parent company Alphabet, digital ads make up more than 80% of Alphabet's revenue, which amounted to $170 billion for the fiscal year of 2019 alone.
In the midst of the pandemic and unprecedented economic turmoil, advertising budgets are the first to get scrapped. As such, both Google and Facebook are expecting massive drops in their income this year. According to Cowen & Co. analysts, Facebook and Google stand to lose 44 billion in worldwide ad revenue this year.
Faced with low ad demand, Google likely sees this as an opportunity to help small businesses that have been hit hard by the pandemic, as well as NGOs on a mission to raise awareness on COVID-19 -- while helping revenue flow through Google's ad system in the long-term.
According to Pichai, $250 million in ad grants will go to the World Health Organization (WHO), as well as more than 100 government agencies around the world, in order to help spread information about the coronavirus. Another $20 million in ad credits will be awarded to community organizations that provide information about relief funds.
Around $340 million in ad credits will be awarded to small and midsize businesses with active Google advertising accounts over the past year.
Another $20 million in Google credits, this time for its cloud services, will be awarded to academic institutions and researchers working on COVID-19 related projects.
A $200 million investment fund has been set up to offer hard cash to small businesses that need access to capital in order to survive the year. An additional $15 million in cash grants were previously announced by Google.org, the philanthropic subsidiary of Alphabet.
Finally, Google will also offer know-how, as well as money, to suppliers of essential medical equipment and medical devices. For instance, Google has already partnered with Magid Glove & Safety to produce 3 million face masks in the coming weeks, which will be donated to the CDC Foundation.
Also this week, Tim Cook, Chief Executive Officer of Apple has announced this week that the company is donating 10 million masks to the medical community in the United States, and millions more for the European regions hit hardest by the COVID-19 pandemic.