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October 28, 2016

Mobile and YouTube fuel profits surge for Google’s Alphabet

Losses in Alphabet's Other Bets category continue to increase.

By CBR Staff Writer

Google parent company Alphabet has reported a 20% increase in quarterly revenue helped by robust advertising on mobile devices and YouTube.

Revenue for the third quarter increased to $22.45bn, from $18.67bn posted in last-year’s corresponding quarter. Net income for Q3 surged to $5.06bn, up from $3.97bn.

Google’s advertising revenue grew 18% to $19.82bn in the third quarter, compared to $16.78bn in the year-ago period.

The company’s Other Bets generated revenue of $197m, an increase of 40%. The company has, however, reported an operating loss of $865m.

Aggregate paid clicks increased 33% in the quarter year-over-year. Cost-per-click on Google's Adsense antitrust case deadline has been extended.Google websites declined 13%, and aggregate cost-per-click was down 5% quarter-over-quarter.

Alphabet CEO Ruth Porat said: “Mobile search and video are powering our core advertising business and we’re excited about the progress of newer businesses in Google and Other Bets.”

Research firm eMarketer has estimated that Google will remain the dominant player in worldwide search ad spending with $47.57bn in search ad revenues in 2016, or 55.2% of the global search ad market.

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In 2016, Google is estimated to generate $34.11bn in net ad revenues globally, an increase of 40.3% over last year. eMarketer predicts net mobile internet ad revenues to reach $42.41bn next year, a 24.3% increase.

Earlier this month, Alphabet’s board authorised the company to repurchase up to $7bn of its Class C capital stock.

The company said it expects to implement the repurchase from time to time, subject to general business and market conditions and other investment opportunities, via open market purchases or privately negotiated transactions.

It was revealed recently that Alphabet sold bonds worth $2bn, joining other technology firms which have raised a total of over $100bn in the market this year.

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