Alphabet earnings surge on mobile, YouTube

The Alphabet earnings miss was mostly caused by a one-time tax payment that pushed the tax rate to 22% from a 5% rate a year earlier

In its most recent quarter, the accelerating trend toward mobile searches may have impacted Google's results.

The company said aggregate paid clicks increased 36 percent year-over-year and 20 percent from last quarter.

Profits grew 8pc to $5.3bn, but missed forecasts.

Google-branded hardware also showed promise as Google Home, a smart speaker, and the Pixel smartphone gained traction over the holidays, Google Chief Executive Sundar Pichai said during the call. Better yet, on smaller mobile displays, Google's ads occupy a large portion of the screen - making it more likely a user will click on them. Despite an increasingly competitive digital video space that is packed with new (and successful) properties, usage of YouTube remains strong and the unit continues to be an important part of parent company Alphabet's portfolio. "We're thoughtfully pursuing big bets and building exciting new technologies, in Google and our Other Bets, that position us well for long term growth", said Ruth Porat, CFO of Alphabet.

Porat said in comments during the conference call that hardware, cloud and Play app store sales all were strong. Amazon seems prepared to abandon quarterly profits to invest even more in faster delivery times or in another huge data centre. We have committed to this for the long-term, as a great way to bring a handsome seamless Google experience to people. (NASDAQ:GOOG) results have failed to match outlook, sending the tech giant's shares dropping in extended trading on Wall Street. Overall the company's Other Bets doubled revenue to $262 million for the quarter, an impressive gain that bodes well for the future, though the cost to maintain these programs still had them adding up to a collective loss of almost $1.1 billion. Indeed, Other Bets made $809 million in the entirety of 2016, which is up 82 percent over 2015. Operating loss in the "Other Bets" fell 10 percent year-over-year to $1.1 billion.

Also, LinkedIn, which was recently acquired by Microsoft, accounted for $228 million in revenue and a net loss of $100 million for the quarter.

Meanwhile, aggregate cost-per-click dropped 15 percent from a year ago and 9 percent from prior quarter.

RBC Capital Markets analyst Mark Mahaney raised concerns about growing Amazon competition, noting that Google Home is being "outsold ten-to-one", which could prove to be a challenge for Google in the future.



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