Alphabet Counting On YouTube, Cloud, And The Smart Home

Alphabet (Nasdaq: GOOG) recently announced its first quarter results. The revenues for the quarter outpaced market expectations, as the company continued to drive growth through its growth engines of YouTube, Cloud, and Smart Home.

Alphabet’s Financials

Alphabet’s adjusted first quarter revenues grew 26% over the year to $27.8 billion, significantly ahead of the Street’s forecast of $24.26 billion. Adjusted EPS of $9.93 was, however, lower than the market’s forecast of $11.74 for the quarter.

By segment, revenues from the Google segment grew 26% to $31 billion. Adjusting for traffic acquisition costs, revenues came in at $27.61 billion. Revenues from Other Bets grew 14% to $150 million.

Among operating metrics, aggregate paid clicks grew 59% over the year and 8% sequentially. Aggregate cost per click fell 19% over the year and declined 7% over the quarter. Impressions on Google properties were flat over the year, but reported a 5% increase over the quarter. Cost per impression on Google Network Members’ properties grew 18% over the year, but recorded 10% decline over the quarter.

Alphabet’s Growth Engines

During the quarter, Alphabet launched Google News Initiative to address the concerns regarding fake news. Alphabet already has a tie up with several players in the news industry. It is strengthening that relationship with an agreement to invest $300 million to elevate and strengthen quality journalism. Some of the new products launched as part of this initiative include Subscribe with Google that allows consumers to use Google account to buy a subscription on participating news sites. Since the launch of the service, Google has seen significant interest in the offering.

Alphabet is also leveraging its machine learning capabilities to improve products like Google Photos, Google Lens, and Google Assistant. For Google Assistant, it has tied up with more than 200 new device partners. All major manufacturers of connected devices for the home in the US can now connect with Google Assistant. Overall, Google Assistant can help with more than 1 million actions, ranging from routine grocery shopping to remitting money using mobile apps.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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