Alphabet Earnings Reflect Google Ads, Uber & Holdings
Alphabet, the parent company of Google, racked up its highest earnings yet with a net profit up 73%, raising $9.4 billion in the first quarter of 2018. In 2017, the company’s first quarter racked up $5.4 billion.
Analysts credited the increase partly to Alphabet’s stake in Uber, but also advertising income not based on its home page search is up from the past, according to sources in a story in the Wall Street Journal. Costs, however, have also gone up for the company, which is using more third-party locations for advertising and ads on partners’ content. The cost of traffic placement reached $6.3 billion, up 35% from 2017.
Wall Street barely reacted to the news, according to U.S. News & World Report, which called after hours trading “flat” after the announcement. Google’s other investments included Google Cloud, smart-home division Nest and hardware sales.
The company’s overall revenue was up 24% to $24.9 billion, higher than analysts’ estimates. According to the WSJ story, Google expects to control 31% of the global ad market this year, in spite of growing competition.
Despite new pending privacy rules planned to take effect on May 25, Google’s CEO said he was not concerned about the change and said the company has already made preparations. Google’s search ads make up the majority of its advertising income, so it doesn’t mine personal information for outside use like Facebook and other competitors.
Alphabet cited $3 billion in net profit increase due to securities, such as its stake in Uber.