Alphabet, Google’s parent, posted a 21.3 per cent increase in second-quarter revenue, exceeding analysts’ expectations, driven by strong advertising sales on mobile devices and for video content. This is especially good news following Alphabet’s lackluster first-quarter earnings, which disappointed when the company missed analyst estimates of $20.38 billion in revenue.
Advertisement
The company’s revenues rose 21 per cent to $US21.5 billion in the second quarter over a year prior.
Facebook’s share of digital ad revenues in the United States may rise from 14.7 percent to 16.1 percent from 2016 to 2017 while Google’s is expected to drop from 37.4 percent to 35.4 percent, according to an eMarketer report. That’s despite the fact that it continues to get less money per click – down 7 percent from this time past year. This was revealed by Google Chief Executive Officer Sundar Pichai.
The news fuelled a 5 per cent jump in Alphabet’s share price in after-market trading and dispelled some of the investor caution left after a disappointing slowdown in the preceding quarter.
“Let me again emphasize that the majority of these efforts are prerevenue, we continue to invest across these opportunities, and are doing so in a disciplined way”, Alphabet’s CFO, Ruth Porat, said in an earnings call.
Alphabet Inc. (GOOGL) avoided putting two bad quarters in a row, thanks to its dominant position in search, which boosted strong second-quarter advertising revenue.
Its operating expenses – other than cost of revenues – were $7.4 billion, or 34% of its revenue.
The company announced a reorganization a year ago that left Google as its main operating unit within Alphabet, with several others representing “moonshot” investments in new areas.
“The losses from the “other bets” category” were more than offset by Google’s continued growth in ad sales and app store revenue.
Interestingly, the company says it now employs 9,427 more people than last quarter, bringing its total headcount to 66,575. The unit, Amazon’s fastest growing business, is seen as the next driver of growth for the company.
Advertisement
Yet Google can still afford to spend huge amounts on speculative projects because it remains the most successful advertising network in the world. Alphabet reported that Other Bets had an $859 million operating loss, compared with a $660 million loss at this point past year, when it was not broken out into its own segment.
