Google's advertising business accounted for $32.6 billion of Alphabet's overall revenue. Gross revenue rose 22 percent, or 23 percent before currency shifts, to $39.3 billion. And underneath, there are small signs of trouble in its ad business.
Alphabet's traffic and acquisition cost were $7.4 billion, up from $6.5 billion a year ago.
The per-click cost on Google's advertising - an imprecise but generally useful yardstick for how much Google is able to charge advertisers - was down 29 percent compared to a year ago, and 9 percent from last quarter.
Google and Facebook ads are still more relevant and effective than most other options because the companies collect so much information on activity across the internet and beyond. "If we do not provide superior value or deliver advertisements efficiently and competitively, our reputation could be affected, we could see a decrease in revenue from advertisers and/or experience other adverse effects to our business". Though the recent earnings report did not breakdown cloud revenue. Advertising directors speaking to CNBC have said some brands were moving 50 to 60 percent of their ad spending from Google to Amazon.More news: Gary Neville Has Predicted When Chelsea Will Sack Maurizo Sarri
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The good news for Alphabet holders is that the company has the ability to boost margins and earnings by restraining spending. For the latter, much of the cost jump over the year was from fiber cable rollouts - Google has an very bad lot of private fiber - while the ad giant also invested in, among other things, data centers and the hiring of more sales and research workers.
Alphabet, parent company of Google, announced their earnings today, and despite beating analyst expectations on most metrics saw its share price fall more than 2% in after-hours trading. Revenues from Other Bets were just $154 million, with operating loss reaching $1.328 billion. The cloud unit's G Suite productivity product now has 5 million customers, he said, up from 4 million in last year's first quarter. YouTube numbers are buried inside Google, while cloud and hardware results are part of Google's Other revenues line.
Expenses rose to $31 billion compared with $24.6 billion in the same period a year ago. By early 2018 cloud computing was reportedly already a $1 billion per quarter revenue generator for Alphabet. Alphabet's profits were thinner because of its investment in cloud services. Chief Executive Officer Sundar Pichai said the cloud operation is "getting large wins", and Porat noted that it's one of the fastest-growing businesses at Alphabet. Impressive on paper, but it still leaves me poor.
Of that figure, Google's advertising revenues represented the company's greatest source of income, totalling approximately $32.64 billion United States dollars (roughly $42.83 billion CAD) in Q4 2018.