Alphabet exceeds expectations as the 'dominant force in digital advertising'
- Author: Joanne Flowers Apr 30, 2017,
Apr 30, 2017, 18:32
The internet company's revenue rose 22% on the same period previous year to 24.7 billion dollars (£19.1bn), a figure that was also more than four billion dollars higher than analysts predicted.
Operating income was up 23% year-on-year to US$6.57 billion and net income climbed 29% to US$5.43 billion.
In its first quarterly report for 2017, the corporation has shown once again that it is a formidable player in advertising, with revenues up more than $4bn on a year ago, from $20.3bn to $24.8bn.
"YouTube revenues continue to grow at a significant rate, driven primarily by video advertising".
Meanwhile, Alphabet's "Other Bets" - separate business units including the Waymo self-driving vehicle business, Google Fiber, thermostat-maker Nest and the life sciences firm Verily - continued to post large losses and modest revenues.
The results did not appear to show a major impact of an ad boycott of Google's YouTube earlier this year after revelations that programmed ads were placed alongside videos showing hateful content.
Alphabet Inc (NASDAQ:GOOGL) reported better-than-expected results for the first quarter of the fiscal year 2017 (1QFY17) after the closing bell on Thursday, April 27.
"Many of the Alphabet companies are already using this technology and are planning to use it even more".
"Other bets" achieved revenues of $244m compared to $165m a year back.
Alphabet shares have increased 12 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 7 percent.
Alphabet's shares traded 4.4% higher after the close of regular Thursday trading. These initiatives, such as Next, Verily and Google Fiber, generated just $244m in revenues, but contributed $855m in losses. Paid clicks, where an advertiser pays only if a user clicks on ads, rose 44 per cent. Analysts on average had expected a rise of 29.7 per cent, according to FactSet StreetAccount.
Google has shifted its business focus to mobile advertising. Alphabet said it changed its methodology for paid clicks and cost per click, resulting in a "modest increase in paid clicks and a modest decrease in cost-per-click".
Google's parent Alphabet has recorded more stunning growth in both profits and revenues, helped once again by its strong performance in the advertising market.
The non-advertising revenue of Google, consisting of the Play store, Pixel smartphones, and the cloud computing business also went up dramatically by 49.4 percent in the quarter to reach $3.10 billion.