Google Parent Alphabet Reports Strong Results on Mobile Ads, YouTube, Other Bets

Google Parent Alphabet Reports Strong Results on Mobile Ads, YouTube, Other Bets

Google’s parent company Alphabet on Thursday reported profit in the recently-ended quarter leapt as money poured in from ads delivered to mobile devices and returns improved on “other bets.”

Alphabet profit was up 32.4 percent to $6.7 billion (roughly Rs. 43,555 crores) on in the quarter on revenue that increased 24 percent to $27.8 billion (roughly Rs. 1,80,724 crores), up 24 percent from the same period a year earlier.

Chief financial officer Ruth Porat credited “strength across Google and Other Bets.”

The earnings topped market expectations, and Alphabet shares jumped in after-market trade on the Nasdaq exchange before concerns about growing expenses apparently caused them to settle back a bit to be up nearly 3 percent to $1,021.

“It is what everybody looks at every time: what is going on with expenses?” independent analyst Rob Enderle told AFP.

“For the most part they seem to be well managed, but you watch to make sure they remember they still have limits even though they are printing money.”

While mobile ads were a main area of growth, they brought with them higher traffic acquisition costs, pushing up Google expenses in a trend seen as unavoidable.

Investing in cloud services and artificial intelligence also means spending more on data centers to provide the massive computing power involved.

“I’ve been really proud of the progress this quarter; launching popular new products and continuing to grow our business in new areas,” Google chief executive Sundar Pichai said in an earnings call with analysts.

“It’s been particularly exciting to see our early bet on artificial intelligence pay off and go from a research project to something that can solve new problems for 1 billion people a day.”

YouTube continued to see “phenomenal growth” with more than 1.5 billion people spending an average of an hour a day watching videos there on mobile devices, and surging use on television screens in homes, according to Pichai.

He boasted of progress winning businesses over to Google services hosted in the internet cloud, where the company competes with Amazon and Microsoft in that market.

Pichai also said that opening day pre-orders for recently unveiled Pixel 2 smartphones were double that seen for the first-generation Pixel.

Google is “seriously committed to making hardware” as well as working with partners such as South Korean consumer electronics giant Samsung which is a major producer of smartphones powered by Android software made available free by the US Internet company.

“The intersection of hardware and software is how you drive computing forward,” Pichai said.

“I think it’s important we thoughtfully put our opinion forward.”

Smartphones and other devices “made by Google” can showcase the potential of its Android and Chrome software, setting a bar for partners.

Moonshots
A corporate reorganisation started two years ago created Alphabet, which has holdings including cash-engine Google and ventures devoted to innovative “moonshots” such as Waymo self-driving car unit and a Loon project for delivering internet service from high-altitude balloons.

Subsidiaries other than Google were put into an “other bets” group which saw revenue in the quarter rise to $302 million (roughly Rs. 1,963 crores) from $197 million (roughly Rs. 1,280 crores) during the same three-month period last year.

Google ads accounted for the bulk of Alphabet revenue, contributing $27.47 billion (roughly Rs. 1,80,369 crores), according to the earnings release.

Alphabet earlier this year spun off a little-known unit working on geothermal power called Dandelion, which will begin offering residential energy services.

Dandelion chief executive Kathy Hannun said her team had been working for several years “to make it easier and more affordable to heat and cool homes with the clean, free, abundant, and renewable energy source right under our feet,” and that the efforts culminated in the creation of an independent company outside of Alphabet.

Meanwhile, Alphabet’s life sciences unit Verily announced a study to track people for years, right down to their genetics, in a quest for insights into staying healthy.

Alphabet also owns Nest, which recently expanded its line-up of smart home devices to include a security system.

Nest, Fiber, and Verily were said to be top performing other bets in the quarter.

Waymo on Thursday announced plans to begin testing self-driving cars in notoriously troublesome ice and snow conditions in the US state of Michigan this winter.

[“Source-gadgets.ndtv”]

Google Parent Alphabet Profit Surges on Mobile, Video Ads

Google Parent Alphabet Profit Surges on Mobile, Video Ads

HIGHLIGHTS

  • Alphabet’s net income climbed 27 percent to $5.06 billion
  • Google is competing with Facebook for dominance in mobile advertising
  • Advertising accounted for 89.1 percent of Google’s total revenue

Google parent Alphabet Inc bested analysts’ estimates for third-quarter profit and revenue on Thursday as the search company showed it has honed its core business for the mobile era and is closing in on the next wave of computing.

Propelled by strong advertising on mobile devices and video site YouTube, Alphabet’s net income climbed 27 percent to $5.06 billion (roughly Rs. 33,839 crores). Revenue jumped 20 percent to $22.45 billion (roughly Rs. 1,50,147 crores), marking the search giant’s seventh straight quarter of double-digit revenue growth.

(Also see: Google Pixel XL Review)

The company authorized a $7 billion repurchase of its Class C stock, pleasing investors who had been craving more after a $5 billion repurchase last year.

Google is competing fiercely with social network Facebook for dominance in the fast-growing mobile advertising market. Google Chief Executive Sundar Pichai touted the company’s gains in the space, and was bullish about recent product launches such as the Google Assistant, the Google Home smart speaker and refinements to the enterprise cloud business.

The products are aimed at the rise of voice search, which many analysts believe will succeed keyboards and touch screens as a primary way users interact with devices.(Also see: Google Assistant Goes Head to Head With Apple’s Siri in Comparison Video)

“We feel well positioned as we transition to a new era of computing,” Pichai said in an conference call. “This new era is one in which people will experience computing more naturally and seamlessly in the context of their lives, powered by intelligent assistants and the cloud.”

Shares of Alphabet, the world’s No. 2 company by market value, were up 1.6 percent in after-hours trading.

The company posted third-quarter adjusted earnings per share of $9.06, beating expectations of $8.63 a share on revenues of $22.05 billion, according to Thomson Reuters estimates.

Google has been dogged by concerns about how it would nudge its vast web advertising business towards mobile, but the company’s recent performance has reassured Wall Street that the transition is well underway, said analyst Colin Gillis of BGC Partners.

“It’s showing that even though they’ve hit lifetime highs, there’s still room to run,” he said.

Advertising revenue, the company’s lifeblood, rose 18.1 percent to $19.82 billion (roughly Rs. 1,32,543 crores) in the third quarter. Paid clicks, or ads for which advertisers pay only when users click on them, rose 33 percent, compared with a rise of 29 percent in the second quarter.

Cost-per-click, or the average amount advertisers pay Google, fell 11 percent in the latest period, but investors are willing to forgive the slump, for now, as it suggests strong mobile growth, said analyst Kerry Rice of Needham & Co.

YouTube continued to post robust gains, Pichai said. Over the past year, Google, Facebook and Twitter Inc have all doubled down on video, a format where advertisers are willing to pay a premium for a few seconds of users’ undivided attention.

Advertising accounted for 89.1 percent of Google’s total revenue in the quarter, and analysts are eager for the company to tap new sources of growth.

One of the leading contenders is Google’s cloud business, which drove a 38.8 percent rise in the company’s “other revenue.”

“As we head into 2017, I expect cloud to be one of our largest areas of investment,” Pichai said.

A relatively late entrant to the cloud business, Google is trying to steal market share from industry leaders Amazon.com and Microsoft. Amazon on Thursday reported a 55 percent revenue increase in its cloud business.

“I would hesitate to say they are competing head-to-head, but they are making up for lost ground,” Rice said.

Alphabet’s “Other Bets” unit generated revenue of $197 million, primarily from Nest, Google Fiber and Verily units, Chief Financial Officer Ruth Porat said during the call.

(Also see: Google Fiber Halts Expansion Plans as Chief Steps Down)

Alphabet said this week it was pausing the rollout of Fiber, a high-speed internet service, in some US cities and that its leader, Craig Barratt, would leave.

Porat played down analysts’ concerns of instability at Other Bets, which has suffered a wave of executive departures, including Nest founder Tony Fadell, self-driving car technology chief Chris Urmson and, most recently, Barratt.

“As we reach for moonshots that will have a big impact in the longer term, it’s inevitable that there will be course corrections along the way, and that some efforts will be more successful than others,” Porat said.

Other Bets, which also includes research unit X, reported an operating loss of $865 million, down from a year-ago loss of $980 million. The narrowing loss suggests Porat is instilling the financial discipline investors have long hoped to see from the company, said Gillis.

“Everybody loves Ruth,” he said.

© Thomson Reuters 2016

Tags: Google, Alphabet Inc, Alphabet Earnings, Cloud, Sundar Pichai, Internet, Android, Apps, Mobiles, PC, Laptops, Wearables
[“Source-Gadgets”]

Google Parent Alphabet Profit Surges on Mobile, Video Ads

Google Parent Alphabet Profit Surges on Mobile, Video Ads

HIGHLIGHTS

  • Alphabet’s net income climbed 27 percent to $5.06 billion
  • Google is competing with Facebook for dominance in mobile advertising
  • Advertising accounted for 89.1 percent of Google’s total revenue

Google parent Alphabet Inc bested analysts’ estimates for third-quarter profit and revenue on Thursday as the search company showed it has honed its core business for the mobile era and is closing in on the next wave of computing.

Propelled by strong advertising on mobile devices and video site YouTube, Alphabet’s net income climbed 27 percent to $5.06 billion (roughly Rs. 33,839 crores). Revenue jumped 20 percent to $22.45 billion (roughly Rs. 1,50,147 crores), marking the search giant’s seventh straight quarter of double-digit revenue growth.

(Also see: Google Pixel XL Review)

The company authorized a $7 billion repurchase of its Class C stock, pleasing investors who had been craving more after a $5 billion repurchase last year.

Google is competing fiercely with social network Facebook for dominance in the fast-growing mobile advertising market. Google Chief Executive Sundar Pichai touted the company’s gains in the space, and was bullish about recent product launches such as the Google Assistant, the Google Home smart speaker and refinements to the enterprise cloud business.

The products are aimed at the rise of voice search, which many analysts believe will succeed keyboards and touch screens as a primary way users interact with devices.(Also see: Google Assistant Goes Head to Head With Apple’s Siri in Comparison Video)

“We feel well positioned as we transition to a new era of computing,” Pichai said in an conference call. “This new era is one in which people will experience computing more naturally and seamlessly in the context of their lives, powered by intelligent assistants and the cloud.”

Shares of Alphabet, the world’s No. 2 company by market value, were up 1.6 percent in after-hours trading.

The company posted third-quarter adjusted earnings per share of $9.06, beating expectations of $8.63 a share on revenues of $22.05 billion, according to Thomson Reuters estimates.

Google has been dogged by concerns about how it would nudge its vast web advertising business towards mobile, but the company’s recent performance has reassured Wall Street that the transition is well underway, said analyst Colin Gillis of BGC Partners.

“It’s showing that even though they’ve hit lifetime highs, there’s still room to run,” he said.

Advertising revenue, the company’s lifeblood, rose 18.1 percent to $19.82 billion (roughly Rs. 1,32,543 crores) in the third quarter. Paid clicks, or ads for which advertisers pay only when users click on them, rose 33 percent, compared with a rise of 29 percent in the second quarter.

Cost-per-click, or the average amount advertisers pay Google, fell 11 percent in the latest period, but investors are willing to forgive the slump, for now, as it suggests strong mobile growth, said analyst Kerry Rice of Needham & Co.

YouTube continued to post robust gains, Pichai said. Over the past year, Google, Facebook and Twitter Inc have all doubled down on video, a format where advertisers are willing to pay a premium for a few seconds of users’ undivided attention.

Advertising accounted for 89.1 percent of Google’s total revenue in the quarter, and analysts are eager for the company to tap new sources of growth.

One of the leading contenders is Google’s cloud business, which drove a 38.8 percent rise in the company’s “other revenue.”

“As we head into 2017, I expect cloud to be one of our largest areas of investment,” Pichai said.

A relatively late entrant to the cloud business, Google is trying to steal market share from industry leaders Amazon.com and Microsoft. Amazon on Thursday reported a 55 percent revenue increase in its cloud business.

“I would hesitate to say they are competing head-to-head, but they are making up for lost ground,” Rice said.

Alphabet’s “Other Bets” unit generated revenue of $197 million, primarily from Nest, Google Fiber and Verily units, Chief Financial Officer Ruth Porat said during the call.

(Also see: Google Fiber Halts Expansion Plans as Chief Steps Down)

Alphabet said this week it was pausing the rollout of Fiber, a high-speed internet service, in some US cities and that its leader, Craig Barratt, would leave.

Porat played down analysts’ concerns of instability at Other Bets, which has suffered a wave of executive departures, including Nest founder Tony Fadell, self-driving car technology chief Chris Urmson and, most recently, Barratt.

“As we reach for moonshots that will have a big impact in the longer term, it’s inevitable that there will be course corrections along the way, and that some efforts will be more successful than others,” Porat said.

Other Bets, which also includes research unit X, reported an operating loss of $865 million, down from a year-ago loss of $980 million. The narrowing loss suggests Porat is instilling the financial discipline investors have long hoped to see from the company, said Gillis.

“Everybody loves Ruth,” he said.

© Thomson Reuters 2016

Tags: Google, Alphabet Inc, Alphabet Earnings, Cloud, Sundar Pichai, Internet, Android, Apps, Mobiles, PC, Laptops, Wearables
[“Source-Gadgets”]