Google parent Alphabet hit by rising costs

Google parent Alphabet hit by rising costs

San Francisco: Riding on Google's robust ad business, the parent company Alphabet has logged $39.3 billion in revenue for the fourth quarter of 2018 - an increase of 22 per cent from the same period a year ago.

The company reported net income of US$8.95 billion, or US$12.77 per Class A and B common share and Class C capital share, in the quarter ended December 31, compared with a loss of US$3.02 billion, or US$4.35 per share, a year earlier when it recorded a one-time tax charge of $9.9 billion.

Monday reported a strong revenue growth of 22 percent year over year to hit 39.27 billion US dollars in the fourth quarter.

Alphabet's earnings per share of $12.77 beat Wall Street expectations of $10.86 per share, according to analysts polled by FactSet.

Greene and incoming Google Cloud CEO Thomas Kurian, a longtime Oracle Corp. Figures for the company year-over-year are up nearly across the board, with the notable exception of Google's traffic acquisition costs (TAC) and operating losses for Google's "Other bets" category. YouTube numbers are buried inside Google, while cloud and hardware results are part of Google's Other revenues line.

Revenue from Alphabet Inc.'s largest source of income, Google's advertising division, bumped its figures by 19.86-percent to land at $32.635 billion for the three month period. About 83 percent of the revenue came from Google's ad system. Excluding traffic acquisition costs, or ad revenue-sharing payments to partner sites, revenue rose to $31.8 billion.

Online commerce grew quickly in the final quarter of 2018, helping Google's ad business.

Even if the futuristic projects brought loss, there were $9 billion in other operating income to offset it.

The downside is average ad prices are shrinking as Google serves more commercial messages through computerized placements and on YouTube - both of which tend to have lower prices than Google's traditional desktop PC web search messages. It's also seeing an "uptick" in $100 million contracts, Porat said.

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.

The latest earnings report showed that Google could earn plenty of money despite going through a year that ended with a troubled second half, racked with data privacy issues and sexual harassment scandals that inspired an employee walkout at Google. Google has seen increasing competiton from the likes of Facebook and Amazon. 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.