When Alphabet Inc. reports results after markets close on Monday, the company's key advertising business is expected to show few signs of wear from privacy concerns that have weighed on internet companies recently.
Alphabet Chief Financial Officer Ruth Porat said capital expenditures this year would "moderate quite significantly", speaking to investors and analysts after results were announced. For a point of comparison, Google's "other revenues" segment "only" brought in $3.4 billion in revenue in the last quarter of 2016, so the business has nearly doubled in the last two years. Cost per click on Google properties such as YouTube and Google Search, dropped 29 percent from past year and 9 percent from last quarter.
Google parent Alphabet reported its fourth quarter earnings for 2018 today, and we'd like to focus on the parts of the report that were related to Google.
On that note, Google earned a net income of $9.7 billion on revenues of $27 billion. That's $375m a day, every damn day, in sales over the year.
Quarterly profit was $8.95 billion, or $12.77 per share, compared with a $3 billion loss a year ago.
Analysts had expected net income of $7.6 billion on revenue of $38.9 billion.
Operating margins, a measure of profitability, slipped to 21 percent from 24 percent due to higher fees to partner websites, as well as larger investments in self-driving subsidiary Waymo and research arm Verily. "But a lot of the additional expenditure is going into cloud where it is unclear whether there will ever be a return on that investment". He did share one small nugget meant to highlight the success of one of its newest devices: one in seven Google Home devices activated during the holiday season was a Google Home Hub, Pichai said.
Earnings per share (non-GAAP) were $12.77, compared to a loss of $4.35 a year ago, and above estimates of $11.08.
The downside is average ad prices are shrinking as Google serves more commercial messages through computerized placements and on YouTube - both of which tend to have lower prices than Google's traditional desktop PC web search messages.
In turn, like many tech companies, Google made much of their services and cloud business, saying it was "one of the fastest growing businesses across Alphabet".
Google remains a dominant player in online advertising even as Alphabet has ventured into "moonshots" in new sectors.
It gave no indication when its self-driving vehicle company Waymo will generate noticeable revenue.
Late previous year, Google brought in former Oracle Corp. executive Thomas Kurian to lead its cloud business into what it hopes to be a rapid growth stage.
Google also noted that its G Suite office productivity cloud service now has 5 million paying customers.