“The strength of the quarter is about mobile”, Google CEO Sundar Picahi said.
Advertisement
Google’s parent company Alphabet Inc (NASDAQ:GOOGL) said strong mobile advertising sales boosted its quarterly profits, driving its share price to record highs. Net income came in at $4.88 billion, compared to $3.93 billion a year ago. It’s also a notable acceleration of growth rate from that year-ago quarter, when top line revenue grew 11%.
Alphabet’s shares rose 4 percent in after hours trading.
The rivalry between the companies has intensified as advertisers shift more of their budgets towards mobile. This is also the result of increased use of search on mobile devices as a whole.
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 millions of third-party websites that draw upon its marketing machine. Advertisers’ spending on mobile search ads increased 63% in the second quarter over a year prior, while overall search-ad spending rose just 10% over the period.
Meanwhile, aggregate cost-per-click dropped 7 percent from last year’s second quarter and 1 from prior quarter.
Facebook awed investors on Wednesday with its earnings report showing strong ad sales growth.
‘Advertisers aren’t willing to pay as much for Google advertising, ‘ he said.
Google showed significant improvement in the video market, which has put it in severe competition with Facebook and Twitter.
Advertisement
As in the past, Google made up the vast, vast majority of Alphabet’s revenue. The key difference between the companies lies in the disparity in size and maturity. “We continue to invest responsibly in support of our many compelling opportunities”, said Ruth Porat, CFO of Alphabet. For consumer hardware, Google revealed Home, its latest smart home product within the internet of things, at its developers conference in May. Other Bets, which includes Alphabet’s moonshot projects, saw losses of $859 million on $185 million in revenue-a not insignificant improvement from the quarter before. One more positive sign is the healthy growth in revenues from non-advertising-related businesses at Google such as the company’s business cloud services, applications and Google Play.
