Business is booming at Google’s parent company, Alphabet Inc., even as it loses billions of dollars on kooky-sounding projects that may never produce any revenue. Alphabet revenues, fueled nearly entirely by Google’s advertising business, rose 21% to $21.5 billion in the second quarter over a year prior.
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Alphabet shares have fallen slightly more than 1 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 6 percent.
Wall Street was looking for Q2 earnings of $8.04 per share with $20.77 billion in revenue. That’s a small fraction of the $2.056 billion in capex that Alphabet dedicated to supporting its core Google business in Q2, which itself represents a slight decline from $2.06 billion in last year’s second quarter. “Video is the killer format on mobile”, Pichai said.
In the Other Bets category, which is made up primarily of Nest and Fiber, as well as Alphabet’s healthcare-driven initiatives and other speculative projects or ‘moonshots, ‘ the tech giant posted revenue of just $185 million over the quarter, with operating losses reaching $859 million. Alphabet missed analyst estimates by as much as $0.42 when it released its Q1 earnings earlier this year. As the company reveals more details we are reminded that last quarter Google noted that YouTube had more viewers aged 18-49 on mobile alone than any other broadcast or cable network in the United States.
Some of these other bets don’t generate any revenue at all yet. More specifically, advertising revenue from Google’s own websites increased 24.2%, to $15.4 billion, while revenue from Google Network Members’ sites grew 3.4%, to $3.743 billion.
MOUNTAIN VIEW, Calif. (AP) – Alphabet Inc.
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Google is maintaining such growth partly because the company has been able to capture advertisers and users as they shift to mobile devices from traditional desktop computers.
