The cloud business is part of Alphabet’s broader efforts to diversify into other industries and reduce reliance on ads, which were responsible for $19.1 billion of Alphabet’s $21.5 billion in second-quarter sales.
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Net income rose to $4.88bn, or $7 per Class A and B common stock, from $3.93bn, or $4.93 per share. Earlier this year, Google announced that it is now serving more search results on mobile devices than desktops, highlighting the importance of mobile for the company and internet consumers.
The Mountain View, California, company can afford to gamble because Google runs the world’s most profitable advertising network, spread across its dominant search engine, YouTube video site and Gmail, as well as well millions of third-party websites that draw upon its marketing machine.
Alphabet – which in addition to owning Google invests in a hodgepodge of off-the-wall, high-tech “Other Bets” such as self-driving cars – said second-quarter profit surged 24 percent to $4.9 billion.
Seems sensible enough. But you wonder if sensible thinking would have given us Google Maps… or encouraged a search company to build a mobile operating system.
“U.S. quarterly growth of 25% was the strongest rate in five years, and along with Facebook’s (FB) results, dispels the notion that digital dollars were decelerating”, wrote Michael Nathanson, analyst at MoffettNathanson.
Finally, revenue from other (non-advertising) sources within Google increased 33% year over year, to $2.3 billion, reflecting strong, broad-based demand across Cloud, Apps, Play, and hardware.
“We’re pleased to be working with FCA, more than doubling the number of cars we’re having”, she said.
The company’s shares rose 6.5% to $816 in after-hours trading on Thursday. Among those who upped their targets is Jefferies analyst Brian Pitz, who believes the shares of Google’s parent company are on the road to reach $1,000 per share.
In the last quarter, Alphabet recorded losses of $859 million in pursing such gambles, much of it on investment in the Google Fiber high-speed internet project. Cost per click was down 7% on a year ago, but paid clicks were up 29%.
(GOOGL) on Thursday reported second-quarter earnings of $4.88 billion.
Apple Inc, Microsoft Corp and Facebook Inc, as well as Alphabet and Amazon, all blew past Wall Street expectations for both profit and revenue.
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With $78 billion in cash and short-term securities on its balance sheet, Google can do another $5 billion repurchase “pretty easily”, he says.
