Google profits, revenue soar in first quarter


Google's digital advertising business generated robust growth in the first quarter while spending surged.

For the three-month period ending March 31st, Alphabet posted huge revenues of $31.1 billion, representing a substantial increase of 26% when compared to Q1 of 2017.

The first quarter profit included one-time gains of $3 billion on its equity investments, believed to have come mainly from a rise in the value of its stake in leading smartphone-summoned ride service Uber.

Alphabet-owned Google continued to see its ad business grow in the first quarter, the company said as it reported earnings on Monday, but CEO Sundar Pichai offered little if any insight into the way imminent European regulations will affect its business-to say nothing of potental legislation out of Washington amid new attention to online privacy. The firm had revenue of $32.32 billion during the quarter, compared to analyst estimates of $31.88 billion.

Last year, for the first time, Google spent more than any corporation on federal lobbying, which was also a first for any Silicon Valley company.

Per-share earnings were $13.33, while Wall Street had predicted $9.28. Other bets' operating losses narrowed from $703 million to $571 million.

Although, in a note to investors, Brian Wieser, senior analyst at Pivotal Research, commented: "Alphabet reported a decent 1Q18, but worse-than-expected margin compression and capex levels have negative read-throughs for our model, causing us to alter our price target from $1040 previously to $970 now".

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Alphabet also switched from citing its cost-per-click metric for its network properties (partners) to cost-per-impression measures, which better reflects how advertisers measure their advertising costs by using the company's platform.

Investors shrugged. In initial after-hours trading, shares were rising about 3 percent before dropping back after the report to about less than a 1 percent rise, which turned negative by a fraction after the earnings conference call ended at 2:30 p.m. PDT.

"Google continues to dominate both mobile and desktop search", noted Ivan Feinseth, an analyst from Tigress Financial Partners.

The number of YouTube channels earning "six figures annually" increased by more than 40% in the early part of the year, according to Pichai who also hunted at beta tests to offer content sponsorship packages.

Facebook's data scandal over Cambridge Analytica, a British research firm hired by the Trump campaign, have stoked new concerns over privacy and the data collection policies of internet companies.

As always, the company's results turn on its advertising business, still the vast majority of revenues. The results were released after the stock markets had closed on Monday.

The company plans to introduce new ways for its video creators to try to make money, including selling concert tickets, chat options and subscriptions, Pichai said. Even so, by making its own rules rather than letting a body like Congress or the FTC create a new privacy standard, the new standard still could remain quite Google-friendly.