Google parent Alphabet profit leaps on ad growth

[SAN FRANCISCO] Google parent Alphabet on Monday reported a surge in quarterly profits, lifted by strong growth in the digital advertising segment it dominates along with Facebook.

Profit in the first three months of 2018 soared more than 70 per cent from a year to US$9.4 billion, Alphabet said in an earnings report that was well above forecasts.

Revenue at the California-based internet giant during the first three months of this year was US$31.1 billion, up 26 per cent from the same period last year.

Alphabet shares were up slighty in after-market trades that followed release of the earnings report.

The firs-quarter profit included one-time gains of US$3 billion on its equity investments, believed to have come mainly from a rise in the value of its stake in leading smartphone-summoned ride service Uber.

The amount of revenue taken in by "other bets" was up, but included an accounting shift in money taken in by smart-home products unit Nest, which has moved back under the Google umbrella.

"We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence," Alphabet chief financial officer Ruth Porat said in an earnings release.

Alphabet is the first major Silicon Valley firm to report first-quarter earnings, and the report comes amid heightened concerns over how private user data is protected in light of the hijacking of data on millions of Facebook users.

With their platforms allowing targeted ads, Google and Facebook dominate the online advertising ecosystem although there have been signs the "duopoly" is weakening slightly.

According to the research firm eMarketer, the two companies will capture a combined 56.8 per cent of US digital ad investment in 2018, down from 58.5 per cent last year, as smaller players such as Amazon and Snapchat are experiencing faster-than-expected growth.

The research firm estimated that Google and Facebook's share of new digital ad dollars is declining as well - to 48 per cent compared with nearly 73 per cent in 2016.

Monday's report showed the Google segment still accounting for the overwhelming majority of revenues with US$30.99 billion, up from US$24.6 billion last year.

Revenues from its "other bets," which include the self-driving car unit Waymo and life sciences firm Verily, amounted to US$150 million from US$132 million.

AFP