Sat, Oct 27, 2018 - Page 10 News List

Alphabet Q3 profit jumps 36% on ads

‘OTHER BETS’:Revenue growth relied on Google’s core advertisement business, which faces increasing scrutiny, as operating losses from other activities rose to US$727 million

AFP, SAN FRANCISCO

Google parent Alphabet Inc on Thursday said that its third-quarter profit rose 36 percent to US$9.2 billion, fueled by gains in digital advertising delivered online and on smartphones.

Profits were better than expected for the US technology giant, while revenues fell short of forecasts, rising 21 percent to US$33.7 billion in the three months ending in September from the same period last year.

“Our business continues to have strong momentum globally, led by mobile search and our many products that help billions of people every day,” Google chief financial officer Ruth Porat said.

In after-hours trading following the report, Alphabet shares slid 4.8 percent on apparent disappointment with revenue growth.

The vast majority of revenue for Alphabet came from Google and more than US$28 billion came from digital advertising, where it leads the market.

However, even though it dominates online advertising, Alphabet and Google have been working to become more diversified, with its own Pixel brand of smartphones and tablets, its Google Home smart speakers, which are gaining ground on market leader Amazon.com Inc, and services including cloud computing.

“Our hardware efforts are picking up real momentum,” Google chief executive Sundar Pichai told analysts on a conference call.

Alphabet’s “other bets,” which include divisions on self-driving cars, Internet balloons, drones, life sciences and cybersecurity, rose to US$146 million, from US$117 million a year earlier.

However, the “other bets,” which are not itemized in Alphabet’s earnings, saw operating losses widen to US$727 million from US$650 million last year.

The earnings report comes as Google faces increasing scrutiny from regulators in the US and Europe over privacy and data protection, especially after the shutdown of its Google+ social network following a security flaw that exposed user data.

The company on Thursday faced a fresh controversy after a New York Times report said that Google covered up claims of sexual harassment and paid one senior executive US$90 million to leave, as he was accused of misconduct.

In a statement, Pichai said that the report was “difficult to read,” but did not address specific allegations.

The company has taken an increasingly hard line on misconduct over the past two years, Pichai said.

In an e-mail to employees, he said that 48 people had been terminated for sexual harassment over the past two years, including 13 who were senior managers and above, and that none received “an exit package.”

“In recent years, we’ve made a number of changes, including taking an increasingly hard line on inappropriate conduct by people in positions of authority,” Pichai said. “We are dead serious about making sure we provide a safe and inclusive workplace.”

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