Alphabet, Google’s parent company, becomes the second internet giant after Facebook to report massive earnings largely driven by mobile and video.
Google Alphabet Profits Rise to $21.5bn in Second Quarter Earnings
In its second quarter, Google’s Alphabet has seen profits increase by 24%. The company attributed its massive growth to the increase in companies buying ads on Google and on other products. At the same time, user click through-rates increased as well.
Google’s advertising revenues increased by 21% to $21.5 billion from a year ago, exceeding analysts’ estimates of $20.76 billion.
Increased smartphone penetration has meant that more than a billion people globally are able to access internet, which has resulted in a significant boost to internet giants including Facebook and Google.
The more consumers use the free services, the more the internet giants are able to sell more ads to businesses looking to reach users.
Google chief executive Sundar Pachai said that mobile was at the heart of the impressive quarter performance.
“Our investment in mobile is now at the core of everything we do today, from search, YouTube, android and advertising.”
In after-hours trading hours, Alphabet stock spiked 4% following a 1.2% slide in most of the year. Indeed, only recently the company has been under significant strain to meet investor expectation as earning fell below analysts’ anticipation for the past 12 months.
Mark Mahaney of RBC Capital Markets said, “There was concern on Wall Street that Google’s best days were behind it but I think they just proved that is not the case.”
He added, “The massive shift to mobile phones has boosted Google’s business as more smartphones means increased Google and YouTube usage.”
Last year, Google said that more than half of it searches originated from mobile devices with analysts estimating that more than half of the company’s revenue can be attributed to mobile.
Indeed mobile search ad spending has increased 63% in the second quarter from last year this time.