Alphabet: Gains of Google’s mother surpass expectations

Oct

29

2016

GoogleLogo150 Alphabet, parent company of Google, with its most recent business results exceeded analysts’ expectations: net profits rose in the third quarter 2016 to 5.06 billion US dollars. This corresponds to an increase of 27% compared to the previous year. Revenues also rose by 20% to $ 22.45 billion. Google’s CEO Sundar Pichai indicated that while mobile advertising is currently competing heavily with Facebook, it is benefiting from new products like the Google Assistant and Google Home. Google sees the future especially in the field of language search.

Many market researchers assume that voice control will become increasingly important in the future and will determine the interaction of users with their hardware in many areas. Here, Pichai sees Google very well positioned for the future with its digital assistant as well as the company’s cloud offerings. After announcing the latest figures, the shares of the alphabet jumped 1.6% upwards. Revenue from advertising rose 18.1% to $ 19.82 billion in the third quarter. Especially in the area of ​​mobile advertising there is still growth potential, so that for Google and / or the mother alphabet still more could be in it.

Alphabet-numbers-oktober-2016

Above all, the paid clicks generated Google even more revenue, here Google only receives money from the advertisers when users click on the ads. In this regard, Google’s earnings rose by 33%. However, the cost per click decreased by 11%. Apparently, investors forgive this Google but presently the excellent results. According to Pichai, YouTube is also expected to continue growing, even now, as Facebook and Twitter are increasingly using their own video integration.

Google’s revenues were generated by advertising at 89.1%. That is why investors currently also want Google to tap into new areas of income. Especially the cloud business should gladly expand Google from the point of view of the stakeholders. This is confirmed by CEO Pichai: “2017, the cloud sector should be one of the areas we invest the most.” However, Google has yet to meet the competition of Amazon and Microsoft, which have been faster with the entry.

Somewhat uncertain it looks currently still around other areas of – such as nest, which Google now from Smart Home brings. Numerous key figures, such as the founder Tony Fadell, have taken on other tasks. Even in the field of self-propelled cars, for a long time there was a lot of hype about it, still has to prove whether Google can be successful. Market researchers say soberly that certainly some of Google’s bets on the future will go out more satisfactorily than others.

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