Alphabet shares sink despite making $8.9bn profit in last quarter

Roman Schwartz
February 5, 2019

The report offered no detailed breakdown of Alphabet income but Google took in the overwhelming majority of revenue in the quarter, $39.1 billion, with $32.6 billion from advertising.

He's expecting ad revenue from mobile search, YouTube and Google's programmatic advertising services to drive growth in the fourth quarter.

Alphabet's cash and other short-term holdings totaled $109.14 billion at the end of 2018.

Alphabet shares have climbed nine per cent since the beginning of the year, while the Standard & Poor's 500 index has risen roughly nine per cent. Porat said headcount growth should moderate in 2019. YouTube numbers are buried inside Google, while cloud and hardware results are part of Google's Other revenues line. Alphabet did not separately disclose how much its Cloud business contributed to this quarter's revenue. Amazon said its AWS revenues rose 45 percent, to $7.4 billion. These declines raised alarm bells among investors concerned that Google's pricing power for ads continues to erode.

Google business revenue was $136.2bn, up from $110.4bn a year ago. "We are very open to acquisitions".

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Google CEO Sundar Pichai made sure to thank outgoing Google Cloud CEO Diane Greene for her efforts during his prepared remarks. Amazon now leads in that market, followed by Microsoft and Google in a somewhat more distant third place.

Google remains a dominant player in online advertising even as Alphabet has ventured into "moonshots" in new sectors.

The company has authorized a plan to buy back an additional $12.5 billion worth of its shares, Porat said. It is simply getting more expensive for Google to stay Google.

Google's mostly free search, video and productivity tools are used by billions of people across the world, despite a backlash in some countries over how the company uses and protects customer information. In particular, Amazon has been aggressively expanding its ad business, which is small but growing quickly. About 83 percent of the revenue came from Google's ad system. "But with talk of economic pressures on the horizon in the US, noticeable sluggishness in their fourth-quarter performance could warn of more dramatic slowdowns in the digital advertising market, which had been relatively insulated while the ad giant enjoyed strong double-digit growth rates". Alphabet's quarterly earnings call just started, and we'll be listening for more details on the successes Google found in its hardware and services business as well as what drove the losses for other bets. Operating loss for the unit was $1.3 billion, way up from $748 million a year ago.

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