Google CEO Sundar Pichai explained that the strong growth was driven by the company’s focus on mobile.
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Alphabet Inc, Google’s parent, revealed that efforts to push its vast advertising business towards mobile is paying off as second quarter earnings handily beat Wall Street’s expectations. But Alphabet appears to be handling the transition to mobile devices well, thanks in part to its presence on Android and iOS devices.
Plus, Gillis says, people are starting to realize that technology companies should be plowing some of their profits into research that could pay off in future years to avoid becoming too dependent on a single product. 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 past year.
Alphabet’s stock gained $43.16, or more than 5 percent, to $809, positioning it to potentially surpass its all-time high of $810.35 in Friday’s regular trading session. This is especially good news following Alphabet’s lackluster first-quarter earnings, which disappointed when the company missed analyst estimates of $20.38 billion in revenue. However, Ruth Porat, the keen financial disciplinarian (Chief Financial Officer) has vowed to keep a closer watch on these new businesses.
Revenue at Alphabet’s Other Bets business rose 150% to $185m, while operating losses widened to $859m.
Alphabet’s revenue was at $21,500 million (nearly Rs 1.43 lakh crore), up 21% from the $17,727 million (nearly Rs 1.18 lakh crore) posted in the same period previous year.
However, she said business trends for these moonshot bets can be “lumpy” because they are early-stage and often not making money.
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Microsoft’s revenue in what it calls its “intelligent cloud” businesses, which includes the Azure cloud platform and server software, rose 7 per cent to $6.7-billion. Google controls the largest section of the digital advertising market, with roughly 30 percent of share, according to the analysis firm eMarketer. Thursday’s results follow better-than-expected earnings and sales from Facebook Wednesday. In any case, it’s an enviable “problem” to have a fast-growing source of incremental ad revenue dragging down aggregate cost-per-click. Similar to the metric’s decline over the past few quarters, however, this is partially owed to the outsized growth of YouTube, where TrueView ads reach consumers earlier in the purchase funnel, and tend to monetize at lower rates, rather than traditional web-based ad impressions. Google doesn’t break out explicitly how much of its revenue comes from mobile advertising.
