Mo­bile, video pump up profit at Google par­ent

Al­pha­bet nar­rows losses on ‘moon­shots’

Kuwait Times - - BUSINESS -


Google par­ent Al­pha­bet on Thurs­day de­liv­ered higher prof­its for the third quar­ter, lifted by gains in mo­bile and video ad­ver­tis­ing as the tech gi­ant nar­rowed losses on its “moon­shots”. Net profit climbed 27 per­cent to $5.1 bil­lion. Rev­enue rose to $22.5 bil­lion from $18.7 bil­lion in the same pe­riod a year ear­lier. Shares rose nearly one per­cent in af­ter-mar­ket trades that fol­lowed the re­lease of the stronger-than-ex­pected earn­ings fig­ures.

“We had a great third quar­ter,” Al­pha­bet chief fi­nan­cial of­fi­cer Ruth Po­rat said in the earn­ings re­lease. “Mo­bile search and video are pow­er­ing our core ad­ver­tis­ing busi­ness and we’re ex­cited about the progress of newer busi­nesses in Google and Other Bets.” It has been about a year since the Cal­i­for­nia in­ter­net ti­tan re­vamped its cor­po­rate struc­ture, mak­ing Google’s In­ter­net oper­a­tions a divi­sion of Al­pha­bet and putting units such as au­ton­o­mous cars and In­ter­net ser­vice bal­loons in an “other bets” or “moon­shots” cat­e­gory.

The self-driv­ing car ef­fort that was once part of the X lab at Google - de­voted to bold, fu­tur­is­tic projects - has be­come a sep­a­rate busi­ness unit at Al­pha­bet. Lit­tle has been re­vealed of its plans for go­ing to mar­ket. The loss re­ported from Other Bets in the re­cently ended quar­ter came to $865 mil­lion, com­pared with $980 mil­lion in the same pe­riod a year ear­lier. “As we reach for moon­shots that have a big im­pact in the longer term, it is in­evitable that some ef­forts will have more suc­cess than other,” Po­rat said. “We are tak­ing the steps nec­es­sary to lay the foun­da­tion for a stronger fu­ture.”

New Hard­ware Strat­egy

Un­der its new struc­ture, Al­pha­bet is seek­ing to ex­pand be­yond its role as a search en­gine that pro­vides ad­ver­tis­ing linked to queries. It has grown rev­enue in mo­bile search but is mov­ing to fur­ther di­ver­sify its rev­enue stream. Ear­lier this month, Google took on ri­vals Ap­ple, Sam­sung and Ama­zon in a new push into hard­ware, launch­ing pre­mi­umpriced, in-house de­signed Pixel smart­phones and a slew of other de­vices show­cas­ing ar­ti­fi­cial in­tel­li­gence prow­ess. Google also re­vealed de­tails about its new “home as­sis­tant” vir­tual re­al­ity head­set and Wi-Fi router sys­tem. But get­ting more heav­ily into hard­ware would en­tail new costs in the cur­rent quar­ter, Po­rat cau­tioned. “We ex­pect to spend more on mar­ket­ing in the yearend quar­ter due to the new prod­ucts,” she said.

The com­pany re­cently put on hold its “Fiber” ini­tia­tive, which aimed to de­liver ul­tra­high-speed res­i­den­tial broad­band to a num­ber of cities. Kansas City in 2011 be­came the first city cho­sen by the group to test its Google Fiber in­ter­net net­work, promis­ing trans­mis­sion speeds of 100 times that of cur­rent net­works.

— AP

MOUN­TAIN VIEW, Cal­i­for­nia: This Jan 3, 2013 file photo shows Google’s head­quar­ters.

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