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Google has revealed that its strong stance on smartphones has contributed to disproportionate growth and profits in the last quarter, less than a week after the EU hit the # 39; Internet business with a fine of 4.3 billion euros.
Shares of Google's parent company, Alphabet, climbed 4% in the secondary market on Monday as Wall Street hosted a new period of accelerated growth in the company's advertising business
. One hundred percent of Alphabet's profits in the three months to the end of June. However, investors have looked at the latest evidence that its Android strategy – launched 10 years ago to ensure that it has a guaranteed way to reach smartphone users with its search engine and his advertising – was a frenzied commercial success.
The latest wave of mobile and YouTube advertising has increased the number of times users have clicked on business ads by 58% over the previous year. According to analysts, Collin Colburn, an analyst at Forrester Research, estimated that "$ 5 billion as a result of 43% growth in the first quarter and a performance that puts the European fine in the shadows. any other company is big enough, but for Google it's a slap on the wrist. "Even though the drop in mobile ad prices has driven down the average revenue of each click by 22%, overall click growth has was "dramatic" and showed how mobile activity was expanding, he added.
net income – the money that Google keeps after deducting the costs it pays to other companies that help deliver its audience – jumped 25% Sundar Pichai, Google's managing director attributes this last leap in part to the company's heavy investment in machine learning, which he says has lifted its four-year growth record, even though its business has doubled. He added that the use of technology d & # 3 Artificial intelligence to improve and automate many aspects of its mobile services had made it a more effective medium for advertisers and application developers. mobile search. He has 90 days to change his Android contract terms or face other fines, although the company has rejected the EU's findings and is considering a court challenge to block the decision pending an appeal.
million. Pichai said Google was still studying how to answer "We still have work to do, but I'm sure we can ensure that Android remains available to scale for users everywhere."
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The cost of acquiring traffic, meanwhile, have worried investors for several quarters, because Google had to pay more in particular to distribute its programmatic and mobile advertising.
In the second quarter, however, it reported a TAC of $ 6.42 billion, or 22.8% of its advertising revenue. This is down from the 23.6% TAC recorded in the first quarter of this year and at a time when most analysts expected the rate to continue to rise. Increase before starting to slow down later in the year.
The EU's 4.3 billion euro fine last week, Alphabet announced that its net income had dropped 9 percent over the previous year during which time she was also fined several billion dollars. Excluding fines from both periods, after-tax profits increased 32% to $ 8.2 billion.
Alphabet achieved a net business turnover of $ 26.2 billion after TACs, compared with $ 25.8 billion for analysts. the EU fine) of 11.75 dollars, against a forecast of 9.54 dollars.
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