Google’s new parent company, Alphabet, has reported an estimated 50% profit increase in its third quarter.
New Google Alphabet Reports 50% Profit Increase in Third QuarterThe financial report indicated a $3.98bn net income, significantly higher than the $2.74bn for the third quarter of last year. For this year’s last quarter, Google has reported $18.7bn in revenue compared with last year’s revenue of $16.5b in the same quarter.
The new company’s growth can be attributed to the rise in YouTube users and mobile searches.
Alphabet was created in August as Google’s parent company, which now houses other products and ventures that Google is investing in.
At the start of next year, Alphabet will present Google’s financial performance separately from the rest of its businesses such as startup venture funding, self-driving cars and healthcare research.
It is expected that Google’s financial figures will indicate the amount of revenue Google would have generated had it not spent the money in creating the new Alphabet Company and its related businesses.
Buyback FrenzyIn the trading after-hours, Alphabet shares skyrocketed by 11% to sell at 722.53, a historical rise that was triggered by news of a wide scale buyback of shares. This move means there will be fewer investors in the future and the remaining ones will accrue higher dividends.
The board of directors at the company supported a share buyback plan that would see up to $5,099,019,513.59 in shares bought back in Q4. There are speculations that this astronomical number is a representation of the square root of 26, the number of letters in the alphabet.
In the past week, YouTube announced that it plans to offer a free monthly subscription in what is seen as an attempt to compete with Amazon Prime and Netflix.
This third quarter seems like a lucrative period for some of the top tech companies including Microsoft and Amazon who have also recorded and reported significant profit increases.