Google parent Alphabet posts strong revenue growth

Revenue came in at $26 billion powered by strength in sales of its cloud offerings, like Azure, which almost doubled.

That sounds like an awesome performance but investors were not thrilled – Alphabet shares were down 2% in January 27 pre-market trading.

Similar to the last few quarters, mobile search was the primary driver, assisted by ongoing strength from YouTube and programmatic.

Google reported an operating profit of $7.8bn for the quarter, up from $6.7bn past year. While aggregate paid clicks were up 36% year-over-year, cost per click was down 15%, which also provided a hit to revenue. The total revenue of Alphabet is $26.06 billion for Q4, up from prior year’s $21.33 billion revenue.

The company’s other revenue, which captures such businesses, climbed 62 per cent to $3.4-billion. But its focus is increasingly on all of the other bets it has made-whether it’s a bet on the future of home automation, with products like the Nest thermostat and the Google Home smart assistant, or bets on mobile hardware like its new Pixel line of smartphones. The company’s costs also tapped higher as it was invested in talent and the core business, according to CNBC.

The last, which is more important to us was hardware which Pichai said was popular with consumers. “What we’re not really seeing a lot of are improvements in enterprise-based cloud services”, said Patrick Moorhead, president and principal analyst with Moor Insights & Strategy.

We are thrilled with the reception, as were the really happy customers we saw over the holiday season.

“We’re committed to this for the long term as a great way to bring a handsome, seamless Google experience to people”, he said.

While Alphabet lost less on moon shots in 2016 compared to the previous year, helped in part by the spinning off the self-driving vehicle project into its own company, they also lost a number of important executives from various projects including Project Loon and Google Fiber. The operating loss was $1.1 billion, down from $1.2 billion. The growth in revenue of this “Other Bets” section is important because Google is hoping to occupy the niche in the days to come.

“The internal transparency we’ve provided to our business leaders across the Other Bets and Google is helping us to allocate resources more thoughtfully across the opportunities that we see”, Porat said.

Also, LinkedIn, which was recently acquired by Microsoft, accounted for $228 million in revenue and a net loss of $100 million for the quarter.

That’s an important move for Google. But today, Google’s Verily life sciences unit said it raised $800 million in funding from Singapore, suggesting another path to efficiency in the unit.