Ruth Porat, Google's chief revenue officer, said she expects this cost to "slow down" in the future. Cost-per-impression on Google Network Members' properties also saw an 18% rise YOY. It's no longer in "other bets", Google's so-called "moonshot" projects such as the self-driving auto unit Waymo, Google Fiber internet service and Verily life sciences unit, which report first-quarte revenue of $150 million and an operating loss of $571 million. Stock investors rewarded Google with a significant jump in its share price. Google is building data centers and investing in undersea cables to connect them with customers, as well as the latest machines for its artificial intelligence work.
The earnings come as the public is increasingly uneasy about data-driven advertising platforms like Google and Facebook, but no backlash from advertisers can be found in Alphabet's earnings.
Google's other revenues, which include its cloud division and hardware sales such as smartphones and the Nest line of home automation technologies, rose from $3.2 billion in Q1 2017 to $4.4 billion in Q1 2018. The company took in a whopping $31.15 billion over the three-month period ending March 31st, which is a 26% increase of Q1 of 2017. Impressions were flat year-over-year, and only up 5% sequentially.
According to the WSJ, the earnings boost helped offset the rising costs Alphabet pays partners such as Apple to direct more smartphone users to Google's search engine. Aggregate paid clicks were up 59 percent year over year and 8 percent sequentially.More news: Viral photo shows passengers incorrectly wearing oxygen masks
Traffic costs accounted for 24% of advertising revenue, up from 22% a year earlier.
Alphabet's non-operating income jumped in the first quarter compared with a year ago because of new accounting rules that require it to record estimates of the value of its investments in startups such as Uber and Airbnb Inc. Google's business of selling targeted ads on other sites across the Web also contributed, Porat said on a conference call with analysts.
Several research analysts recently weighed in on the company. The business had revenue of $31.15 billion for the quarter, compared to analyst estimates of $30.28 billion.
Google's parent company Alphabet on Monday reported strong first-quarter profit growth despite increasing concerns over data collection, which drives a significant amount of the company's business model. Morgan Stanley reissued a "buy" rating on shares of Alphabet in a research report on Friday, January 26th. Alphabet knows it's going to have to develop new revenue-bearing products and bring them to the market for the point at which the total addressable market of would-be web users peaks and those users stop adding to their daily consumption of digital material.
It's a particular concern because Google likely garners more data on individuals than Facebook does.