Alphabet is one of the strongest technology companies in the world, and this is confirmed in its latest financial results relating to the third quarter of 2016 ended on 30 September.
The figures presented are impressive Google bought shown with the previous year, which has caused shares have soared to a record high for the company. In short, Google is reporting revenues of 22,451 million, i.e. an increase of 20% over the same period last year, which means that the strategy shift towards Alphabet has been a real success.
Google begins to wean advertising
Something that stands out from the numbers presented by Google for this quarter is the decline in advertising revenue, which in previous years would have meant an overall drop in income due to their dependence on this sector, but this time it was not, advertising fell but revenue grew by 20%.
Broadly speaking, clicks on advertising links increased by 33% over the previous year while the cost per click decreased at 11%, only here the market expected a decline of 4.8%. This caused a slight drop in the overall numbers but nothing that significantly affect the earnings of the company.
One of the pending tasks is to make Google your ads are profitable on mobile devices, because today the majority comes from desktop, which for example Facebook has managed to develop flawlessly being the most important in mobile advertising.
Google experiments continue to grow slowly, but growing
One of the problems that Google had in previous years were his experiments, which are contained in the “Other Bets” section and became a concern for investors because of the risk he had to invest in something that did not guarantee take off. With the reorganization towards Alphabet this settled so that risks are reduced by having a sort of “independent companies” that do not endanger the money of the parent company, allowing experiments continue without being a threat.
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For this quarter, “Other Bets” reported revenues of $ 197 million with an operating loss of 865 million, which when compared to last year when they presented 141 million revenues 980 million loss, then we see a slight sign of recovery, however, it remains the section more spending accounts for the company, why Ruth Porat, CFO of the company, has come to declare that it will be more prudent with expenses of the company in the future.
Widespread growth in the company
Regarding the rest of the divisions we see signs of health and very good numbers, where all present positive figures showing that everything is going perfectly. We have for example the case of websites with growth of 23% over the previous year, while “Other revenues”, which is where hardware and cloud services as the Play Store, shows an increase of 39%.
What will be interesting to see in the next quarterly report is the income earned by hardware, since in the latter period the launch of new devices in the company, such as Pixel smartphones, it has Google Home, Daydream View and CC, which no doubt that the figures will increase significantly ahead of a 2017 aims to be historic and very important for the company.
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