Google Parent Alphabet's Revenue Continues to March Higher
April 27 2017 - 4:48PM
Dow Jones News
By Rolfe Winkler
Google parent Alphabet Inc. on Thursday posted a sharp increase
in first-quarter revenue, continuing a trend of sharp growth
seemingly unscathed by boycotts from some of its major
advertisers.
Alphabet said net revenue rose 22% to $24.75 billion from a year
earlier, beating Wall Street estimates of $24.22 billion, according
to Thomson Reuters. First-quarter profit rose 29% to $5.43 billion,
or $7.73 a share, from $4.21 billion in the same quarter last year.
Analysts had expected $7.39 per share.
Alphabet's shares traded 4.4% higher after the close of regular
Thursday trading.
Analysts had expected Google's advertising revenue to have taken
a hit in the first quarter because major advertisers, including
Coca-Cola Co. and Wal-Mart Stores Inc., pulled their spending on
all Google advertising except targeted search ads after they were
spliced in with offensive content. YouTube responded by giving them
more controls over where not to place their ads. Growth in YouTube
advertising has propelled Alphabet's earnings in recent
quarters.
Google has come to dominate the online advertising market along
with Facebook Inc. The digital giants gobbled up an estimated 77%
of the gross advertising spend in 2016, up from 72% the year
before, said Pivotal Research analyst Brian Wieser analyzing data
published by the Interactive Advertising Bureau.
Google and Facebook captured 99% of the online ad industry's
revenue growth in 2016, estimated Mr. Wieser. On balance the rest
of the industry was flat.
Alphabet is trying to diversify its business beyond online
advertising, and its "cloud" business that competes with Amazon
Inc.'s web services unit is a key focus. Google executives are so
optimistic about the tech giant's cloud business, selling computing
power to companies over the internet, they say it can one day
eclipse Google's massive advertising business.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
(END) Dow Jones Newswires
April 27, 2017 16:33 ET (20:33 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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