Although Alphabet doesn’t specify just how much money it pours into the X lab, it is among the costliest drains in a far-flung category that falls under the “Other Bets” segment in the company’s financial statement.
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Google’s parent Alphabet Inc said second quarter revenue rose by 21.3 per cent to $US21.5 billion from $US17.73 billion a year earlier. Alphabet earnings have missed analysts’ estimates in eight of the past 12 quarters.
Expectations from Wall Street were $8.04 a share but were surpassed easily at $8.42 per share.
“The internet is one of the world’s most powerful equalisers and for making information available for everyone wherever they are”, Mr Pichai said.
But, for now, it is costing Google way more than it makes back from sales.
Earlier this week, Facebook also hailed the success of its mobile advertising.
“Our Q1 results represent a tremendous start to the year with 17% revenue growth year on year and 23% growth on a constant currency basis”. The company’s net sales rose 31.1 per cent to $30.40 billion in the second quarter ended June 30th.
Although Google has a presence in mobile for long advertisers usually pay less for user clicks on mobile advertisements compared to the desktop ads which have been the strength of Google. Cost per click was down 7% on a year ago, but paid clicks were up 29%.
Google parent company Alphabet reported revenues of $21.5bn in its second quarter results as advertisers continue to shift to mobile.
This news sent Company’s stock surging to close at 775.00 up almost 4% in after-hours trading on Thursday July 28, 2016.
Excluding items, Alphabet earned United States dollars 8.42 per share, beating analysts average estimate of USD 8.04, according to Thomson Reuters I/B/E/S. Google’s aggregate paid clicks grew 29% from the same period past year, while paid clicks on Google websites were up 37%. The increase in revenue comes as Google’s advertising value is declining while advertising volume is on the rise. Mobile ads are generally less expensive than desktop ads, so as the number of mobile ads has increased, Google’s cost per click has declined.
So far, that has yielded new popular applications like Google Inbox and Photos, new cloud services for businesses, and also allowed it to improve the efficiency of its giant data centres.
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Google is betting the cloud can become a major revenue driver over the next several years and is investing hundreds of millions of dollars in building new data centers.
