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Alphabet reports strong Q1 on the back of booming advertising business

07 May 2017
Alphabet reports strong Q1 on the back of booming advertising business

The company had reported the adjusted revenue growth of 22.2 percent to $24.75 billion in the first quarter of FY 17 from $20.26 billion in the corresponding quarter a year ago, beating the analysts' estimates for revenue of $2.47 billion.

Google's "other revenues", a category that includes hardware and cloud services, hit almost $3.1 billion in the most recent quarter, a gain of about 50% from the same quarter a year earlier.

Chief financial officer Ruth Porat said: "Our excellent results represent a terrific start to 2017".

Alphabet, the holding company that includes Google, posted $24.8 billion in revenue, beating the $24.2 billion Wall Street expected, and up 22 percent year-over-year.

What is interesting is that much of this success remains within Google's online advertising revenues, from both search ads and YouTube.

Paid clicks, where an advertiser pays only if a user clicks on ads, rose 44 percent - analysts were, according to Reuters, only expecting a rise of 29.7 percent.

Net income rose to USD 5.43 billion, or USD 7.73 per share, from USD 4.21 billion, or USD 6.02 per share, a year earlier. Prices of the ad click services offered by Google has also reportedly fallen by 15% despite the increase in the number of clicks recorded. Aggregate cost-per-clicks came in at a loss of 19% for the quarter.

Google has boosted its revenues under the leadership of Pichai from its core advertising business and also from You Tube.

The search engine giants' network members' properties revenues were $4.01 billion, Google advertising revenues were $21.41 billion, Google other revenues were $3.1 billion, Google segment revenues were $24.51 billion.

Alphabet missed its previous quarterly earnings report missing analysts estimates of $9.76 earnings per share, delivering only $9.36 per share on a revenue of $26.05 billion.

Facebook and Google now dominate the industry growth in digital advertising.

"With the change to Alphabet, oversight has been easier because of increased visibility", Page writes.

Diane Greene, now senior vice president for Google's cloud operations, earned total compensation of $43.7 million past year, most of it via two stock awards totaling $42.8 million. We have streamlined efforts where it made sense and in other areas we have seen places to double down.