Google's Alphabet sees revenue soar
Commentators put the increase down to profits from advertising
Google's parent company Alphabet has reported a more than 20 per cent increase in revenue on the back of strong digital ad sales and an accounting adjustment in the company's latest financial results.
The Silicon Valley behemoth’s quarterly figures indicate a rise in revenue of $31,1 billion, a dramatic increase of 26% over the same period last year. Net income was up by almost $4 billion to more than $9,4 billion – a 73% sea change.
Commentators put the increase down to profits from advertising, with Google continuing to contribute the vast majority of Alphabet’s revenue and income – just $200 million of its $31,1 billion revenue could be attributed to other sources.
"Our ongoing strong revenue growth reflects our momentum globally, up 26% versus the first quarter of 2017 and 23% on a constant currency basis to 31.1 billion dollars," Alphabet CFO Ruth Porat said.
"We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence."
Alphabet used a new method to account for its investments in startups such as Uber and Airbnb Inc, which realised about $2.4 billion in earnings and a nine percent drop in the effective tax rate. The company now records estimates of the current value of its startup investments rather than waiting to report income once it has opportunity to sell those shares.
Google continues to diversify its product offering outside the ubiquitous search engine to include hardware such as the Pixel smartphone and Google Home line of smart speakers – in response to rivals like Amazon. The firm will hold its annual developer conference in May, with major announcements expected.
The positive results come amid the fracas over Facebook’s breach of trust regarding Cambridge Analytica. American and European regulators are looking to clamp down on privacy transgressions, which could curtail online ad spending.