Google Profits Slump 28%, But Ad Revenues Soar To $23 Billion

Google Profits Slump 28%, But Ad Revenues Soar To $23 Billion

Google’s parent company Alphabet has today announced its profits in the three months to June were down a whopping 28 per cent, namely due to the monster €2.42 billion ($A3.59 billion) the EU imposed on the tech giant last month for breaching anti-competitive laws.

B&T Magazine
Posted by B&T Magazine

The result was the biggest decline in Alphabet’s net income since the fourth quarter of 2008. However, without the fine, Alphabet’s profits would have actually grown 28 per cent year on year to $US6.3 billion or $A7.95 billion.

Revenues from the company’s search advertising and display ads were up 20 per cent to $US18.4 billion ($A23.2 billion), while its traffic acquisition costs were up 28 per cent.

Alphabet said clicks on its ads were up 52 per cent in the second quarter from a year earlier. However, ads on smartphones and in YouTube videos generally earn less money per ad than search ads on traditional computers meaning its revenue per click fell 23 per cent in the quarter.

Interestingly, the results shows little impact from the recent global boycott of YouTube after ads were found to be accompanying hate and racist sites.

Commenting on the results, Ruth Porat, Alphabet’s chief financial officer, said: “We’re delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams.”