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. The company had revenue of $21500.00 million for the quarter, compared to analysts expectations of $20774.44 million. After subtracting ad commissions, Alphabet’s revenue climbed 22 percent to $17.5 billion.
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Thanks to a rapid expansion of smartphones connected to the internet, businesses that rely on ads, such as Facebook and Google, had a lot to win. However, they like the potential for some of this to be offset by early Expanded Text Ads and a fourth mobile ad unit for some commercial queries.
Patel stated that it is hard to look at Google’s earnings without looking at Samsung (SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF))’s earnings, which were “incredible” and driven by strong sales of its flagship phone, the Galaxy S7. He notes that upward trends in profitability for the companies have everything to do with the widespread access to internet-connected smartphones.
Sundar Pichai, CEO of Google, said the company was moving ahead with Daydream, the company’s new Android-based virtual reality platform.
“Once again, the primary driver was increased use of mobile search by consumers, benefiting from our ongoing efforts to enhance the mobile search experience”, she told investors, adding that desktop and tablet search, YouTube and programmatic advertising were also strong. The firm explained that the upbeat results reflect Google Websites’ accelerating growth, especially in mobile search and YouTube. Google also struck a deal with Apple to make Google the standard search engine on iPhones.
Google doesn’t break out explicitly how much of its revenue comes from mobile advertising.
The leading social media company’s wildly popular mobile app and push into video attracted new advertisers and encouraged existing ones to spend more.
That beat analyst expectations of $20.8 billion in revenue and profit of $3.9 billion, or $8.04 per share. They also noted that this was the third quarter in a row that management highlighted this hard comparison, which is due to the ad format change that occurred in the third quarter of previous year.
One drawback to the increased appeal of mobile ads is that Google recorded a decrease in the sums that advertisers pay Google for each clicked ad. As mobile ads pay less than their desktop counterparts, this meant that the revenue per clicked ad declined, despite the boost in clicked mobile ads. Advertising accounted for $19.1bn in revenue.
The company continued to lose money on its “Other Bets”, things like Google Fiber and Nest, although at a less dramatic pace: Revenue from Other Bets nearly tripled, while losses rose 30% to $859 million.
Whether it was canny for Google to fragment itself up in such a manner was a big question.
Google’s advertising model now faces a trade-off.
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Shares of major technology companies Facebook, Amazon, Netflix, and Alphabet-collectively known as FANG stocks-pose as one of the most crucial market sentiment-gauging metrics.
