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Alphabet’s financial results underwhelm, cloud performance unclear

Written by Tue 30 Apr 2019

£1.3 billion EU competition fine takes its toll on Google’s parent company Alphabet

Google’s parent company Alphabet reported below expectation financial results, as the tech giant absorbed a $1.7 billion (£1.3 billion) dollar competition fine from the European Commission.

The firm’s parent company Alphabet reported revenue for the last three months of 36.3 billion dollars (£28 billion), below the 37.34 billion (£28.9 billion) that had been predicted.

Net income was 6.6 billion dollars (£5.1 billion).

Google’s advertising revenue was up on the same period last year, rising from 26.6 billion to 30.7 billion dollars (£23.7 billion). This was an increase of 17 percent, however, this time last year the firm’s revenue was growing at a rate of 26 percent.

While revenue from Alphabet’s Other Bets – the collection of smaller, more outlandish companies which includes autonomous car firm Waymo – saw revenues rise from 150 to 170 million dollars (£131.4 million).

However, operating loss for the Other Bets was 868 million dollars (£671 million), up from 571 million (£441 million) a year ago.

“We delivered robust growth led by mobile search, YouTube, and Cloud with Alphabet revenues of $36.3 billion, up 17 percent versus last year, or 19 percent on a constant currency basis,” Alphabet chief financial officer Ruth Porat said.

Cloud and clear

Interestingly, Google refused to divulge its cloud revenue to analysts during the earnings call despite hailing its growth.

“Google Cloud Platform remains one of the fastest growing businesses in Alphabet with strong customer momentum reflected in particular in demand for our compute and data analytics products,” said Porat.

“We remain focused on, and excited by, the significant growth opportunities across our businesses.”

“I think we are building a strong business across all our verticals, and we’re definitely are seeing a strong momentum and look forward to being able to share more at the appropriate time,” CEO Sundar Pichai added.

Google’s fine from the European Commission, issued in March, was for “illegal practices in search advertising brokering to cement its dominant market position”.

EC Commissioner for Competition Margrethe Vestager said at the time that by abusing its position, Google had “denied consumers choice, innovative products and fair prices”.

Written by Tue 30 Apr 2019


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