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Google posts $31.15 bn revenues in Q1 2018

24-April-2018
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Google posts $31.15 bn revenues in Q1 2018

Google’s parent company Alphabet posted a revenue of $31.15 billion for the first quarter of the year - a 26% YOY growth over 2017.

Despite news of advertisers withdrawing ads over brand safety concerns and allegations of misplacement of ads, Google's advertising revenue continued to thrive. Advertising accounted for a big chunk of Alphabet's revenue at $26.642 billion - a growth of 20% over last year.

Google products - Search and YouTube, noted an increase of 8 percent in paid clicks quarter-over-quarter, while cost-per-click, decreased 7 percent quarter-over-quarter (with a 59 percent increase and a 19 percent decrease year-over-year, respectively).

Discussing the quarterly results in the earnings call, Ruth Porat, CFO of Alphabet and Google, said: Google sites revenues were $22 billion in the quarter, up 26% year-over-year, led again by mobile search complemented by solid growth from desktop search and strong performance from YouTube. Network revenues were $4.6 billion, up 16% year-on-year, reflecting the ongoing momentum of programmatic and AdMob.

Google’s total traffic acquisition costs (TAC) were 24% of total advertising revenues and up 36% year-over-year. “The increase in the sites TAC rate year-over-year was driven by changes in partner agreements and the ongoing shift to mobile, which carries higher TAC,” she said. Porat further explained that the trend affecting the network TAC rate is the shift to programmatic, which carries higher TAC. She said that Google anticipates that the pace of growth in sites TAC, as a percentage of sites revenues, will slow down beginning in the second quarter.

Google CEO, Sundar Pichai gave investors a detailed lowdown on GSuite, YouTube, Nest, and advertising. On YouTube he said: We are aggressively combating content that violates our strict policies through a combination of user and machine flags. Pichai, noted that in the last quarter of 2017 Googleweeded out over 6 million videos that violated YouTube's content guidelines. "Over 75% of those videos were removed before receiving a single view,” he added.

Replying to a question on the implementation of GDPR, Pichai, said, “We are committed to meeting requirements on May 25 and also long term. We are working very closely with advertisers, publishers and our partners.”

To a question on how GDPR may impact the ad targeting abilities of Google, Pichai said, “It's important to understand that most of our ad business is Search, where we rely on very limited information, essentially what is in the keywords to show a relevant ad or product.”

For the full transcript of the earning calls visit: Seeking Alpha

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