Alphabet's latest quarter looks 'TACky' due to Google parent's traffic acquisition costs

Share
Alphabet's latest quarter looks 'TACky' due to Google parent's traffic acquisition costs

According to the company, though that's a drop in the bucket, growth is definitely going in the right direction.

The cost-per-click on Google ads was down 26% from the year-ago quarter.

However, profits for the quarter were £2.7bn, more than 40% lower than they would have been without the fine.

Alphabet shares have been trading at a 25.5 P/E, above its 15.6% long-term growth rate for a PEG (P/E to growth) ratio of 1.6, pricey but not dangerously expensive.

Alphabet makes the majority of its money from advertising.

This article summarizes Google earnings for the second quarter of the company's fiscal year.

However, the growth of Google's advertising revenue declined during the quarter due to Google paying a large sum to its partner companies in ensuring that more traffic is being brought to Google's search engine.

Furthermore, another reason for having an undesirable effect on the report was a whopping fine of $2.74 billion, that was charged European Union on Google, for antitrust violations.

Shares of Alphabet were down 3% in after hours trading Monday following the earnings results.

Alphabet, the owner of Google and YouTube, said it made $3.5 billion in net income on sales of $26 billion.

Net profit came in at $3.5 billion for the three months under review.

"We've been talking about our bigger investment areas within Google and you can see the momentum here reflecting contributions from our newer revenue streams", CFO Ruth Porat said during a conference call with investors on Monday. (Google) and its Internet products, such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo and X. The Business's segments include Google and Other Bets.

"2Q TAC was ~6% (~$290mm) higher than expected driven by the strength of mobile search and GOOGL's programmatic business", they added.

Moreover, Google CEO, Sundar Pichai, was included on the board of the Alphabet.

Google scored three times as many large deals for its cloud service in the second quarter as it did in the same period past year, according to Google CEO Sundar Pichai.

In October 2015, Alphabet was created as the parent holding company of Google and its affiliated businesses.

But the real question mark, say analysts, is what this may mean for Google's business ahead in Europe and indeed, in the United States, and whether the group is expecting any more fines coming down the track.

Share

Advertisement

Related Posts

Rory McIlroy rues missed opportunities on tough Day Three at The Open
Of the first 61 players, 34 broke par, including the 62 by Brendan Steele that set a record for major championship play. Stenson shot a final round 63, a record 20 under par and defeated Michelson by three strokes.

England bat in WWC final
It was needed, and this knock will give her confidence tomorrow when she is in a position to take more responsibility as a batter. Gunn and Laura Marsh (14 not out) put up an unbeaten partnership of 32 runs to take England to a competitive total of 228 runs.

US vs. Mexico championship foiled by Jamaica in Gold Cup
When the Mexican team left the pitch, it heard a chorus of jeers from the fans that had stuck around past the final whistle. IN PHOTO: Jamaica's Kemar Lawrence (left) and Mexico's Jesus Duenas battle for the ball during first-half action.

John McCain enjoys hike outside Sedona with friends, daughter
You all have made this about John McCain and Kelli Ward", she said, adding that she's "laser-focused" on her race against Flake. Few could disagree that Congress today desperately needs that distinctive brand of bipartisanship and maturity to move forward.

Carmelo Anthony Still Focused on Trade to Houston
With Anthony also a free agent next summer, look for it to take multiple picks for the Knicks to be able to pry Irving away. Smith to high-paying long-term deals that are now impeding Cleveland's flexibility and ability to improve the roster.

Mourinho Reveals How Long He Wants To Be At Man Utd
The first ever Manchester derby on foreign soil went United's way as Lukaku and Marcus Rashford put City to the sword in Houston . They have agreed a deal with Real Madrid for Alvaro Morata and the Spaniard will sign subject to personal terms and a medical.

Trump to Senate: Stay in Washington and work on healthcare
It's critical to considering whether our national obligation is to make sure health care is available to all people. Waiting for all the details ahead of time, Majority Whip John Cornyn told reporters, is a "luxury we don't have".

Constituents Asking Senators to Vote No One More Time
The United States is the greatest country in the world, and we must strive to fix Obamacare to cover as many people as possible. Ok, you can be exhausted but don't say "sick", because you can't afford to be sick. "It's risky and could be deadly to people".

Initial prognosis deems Clayton Kershaw out 4-6 weeks
A month after that, they sent three pitching prospects to the Oakland A's in a deal for Rich Hill (and outfielder Josh Reddick). McCullers has allowed 15 earned runs during his past three starts after allowing 12 earned runs in his previous 10 starts.

Overnight low temperatures will 'provide little relief' from excessive heat
On Saturday , the chance for showers and thunderstorms remains, with a high near 92 and a balmy overnight low of 75. Along with cooler temperatures, humidity will be lower making it feel less muggy with no oppressive heat indices.

© 2015 Chester Weekly. All Rights reserved.