Google parent company Alphabet reported on Thursday, the fourth quarter revenue growth rate is close to the profit growth of 3 times. In addition to traditional search advertising, Alphabet is exploring new sources of growth.
Alphabet fourth quarter profit grew by $5 billion 330 million to $8.3%, less than analysts expected. Revenue grew 22% to $26 billion 100 million, more than expected. Alphabet said that profits were worse than expected due to one-off tax adjustments. Stock market on Thursday, Alphabet shares fell 2.1%.
based search engine, Google to build the world’s largest advertising business. Due to the popularity of smart phones, the development of mobile Internet, users are clicking on more search advertising. In order to maintain strong growth, Google is also concerned about YouTube video advertising.
JP Morgan securities analyst (Ron Josey), said: in the earnings conference call, YouTube is the focus of attention. This is the key after the search."
Alphabet, chief financial officer Ruth Polate (Ruth Porat) said in a conference call, on the Google platform, new forms of advertising, such as mobile search advertising, YouTube advertising and automatic advertising purchase "has just opened a corner of the curtain". Google will have a huge opportunity in the future.
Google to explore new sources of advertising revenue has also brought problems: users see more and more advertising, but advertisers pay lower prices. The fourth quarter, Google’s ad clicks grew by 36%, but advertising prices fell by 15%. These two data are at least a record high of 3 years.
The increase in the number of
advertising and price decline was mainly due to the larger share of mobile search, while the price of mobile search advertising is lower than the price of desktop advertising. The fourth quarter, Google said that this difference is due to a large proportion of YouTube advertising. Relative to Google search advertising, YouTube advertising price is low.
Polate said, other new businesses, including cloud computing, hardware and YouTube service order "in the next few years Google will become the main revenue drivers". In order to achieve this goal, Google is investing heavily in the fourth quarter of Google’s capital spending grew by nearly $1 billion to $3 billion 80 million. A large part of which is used to build data centers in the cloud computing market with Amazon and Microsoft to compete.
Alphabet is trying to reduce reliance on the advertising business, the fourth quarter of the advertising business revenue contribution to Alphabet was 85.9%, down from last year’s $89.4%. Alphabet reported that fourth quarter non advertising revenues of $3 billion 400 million, an increase of 62%. This is mainly;