Google’s revenues increased by 24% YoY to $33.74 billion from $24.7 billion a year ago, for the quarter ended September 2018. Advertising revenues accounted for 86% of the total revenues. Google posted a profit of $9.1 billion in the quarter, as compared to $6.7 billion in the same quarter last year. In a call with investors, Alphabet CFO Ruth Porat said that revenues were driven by Search, both mobile and Desktop, and YouTube.
Google’s “Other” revenues which include its cloud services, hardware, and Chromebook sales, also grew 29% to $4.6 billion. Its hardware business includes Pixel phones, the Home smart speaker line, and Chromecast devices. Google CEO Sundar Pichai said daily active users (DAUs) of Google Home devices have grown 5 times in the past year.
Google’s “Other bets”, which includes life sciences arm Verily and self-driving car unit Waymo, internet service provider Fiber, the Nest home devices unit, among others – continued to register losses. This quarter, losses increased to $727 million from $650 million last quarter. Revenues in this segment were driven primarily by Verily and Fiber, as in the last quarter.
Traffic acquisition costs, such as the fee Google pays Apple for retaining Google as the default search engine on iPhones, rose by 19.6% year-over-year to $6.5 billion in the quarter. At 23%, traffic acquisitions costs remained the same YoY.
Google Pay, which the company rebranded from Tez earlier this year, claims that 30 million businesses and people use the app. It claims to have carried out 1 billion transactions since the app launched.
EU anti-trust regulation
Last quarter, Alphabet faced a $5 billion fine from the European Commission for violating its anti-trust regulations. The commission ordered the company to change the way it bundles its software (such as Chrome or Search) into Android phones and Play Store while licensing out its OS.
Google now reportedly plans to charge phone manufacturers additional fees to install Google Mobile Services suite which would include Play Store and other essential Android app.
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