Google Posts Strong Earnings as Threats Mount -- Update
July 25 2019 - 5:24PM
Dow Jones News
By Rob Copeland
Google's parent bounced back from a rare stumble, posting strong
earnings as an impending antitrust investigation threatens to choke
the search giant's online-advertising spigot.
Alphabet Inc. reported revenue of $38.9 billion, up 19% over the
same period last year. While that is slower growth than usual for
the technology mainstay, it beats bearish analyst prognostications
stemming from the company's earnings miss a quarter earlier.
Alphabet stock is the worst-performing this year among large
tech peers. Shares bounced back after hours Thursday, up 8%.
The results highlight Google's resilience in old-school internet
search, where its dominance remains near absolute. Time and again,
the franchise has come through for Google as forays into tertiary
areas disappoint. Analysts expect Google to continue to pack ever
more ads into areas like Maps and YouTube to keep gassing growth,
and Thursday's results demonstrate the rewards of those
efforts.
Alphabet has earned $63 billion in the last three calendar
years, providing plenty of grist for the company's less profitable
misadventures.
At 21 years old, Google is hardly a technology up-and-comer any
longer, and this year a series of colliding challenges threaten to
take a toll. Advertising growth is slowing over the long term,
pinched by rising competition and costly changes to important units
like YouTube.
Meanwhile, efforts in unproven areas like cloud computing and
hardware bleed resources, while U.S. prosecutors this week tipped
the start of a broad new review into whether tech giants like
Google are abusing their dominance.
The earnings continue a trend of strong financial performance by
Silicon Valley's best-known technology companies as scrutiny of the
industry intensifies. Social giants Facebook Inc. and Snap Inc.
both reported strong earnings this week, buoyed by new user
growth.
Alphabet also authorized a stock buyback of $25 billion.
Write to Rob Copeland at rob.copeland@wsj.com
(END) Dow Jones Newswires
July 25, 2019 17:09 ET (21:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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