Alphabet earnings Q3 2017


Google parent Alphabet has seen Class A shares rise about 25 percent this year as advertisers have continued to lean heavily on search advertising and YouTube.

Network revenues were up 16 percent during the third quarter.

“Our momentum is a result of investments that we’ve been making over many years in people, products and partnerships,” Porat said.

But a growing share of ads moving to mobile and programmatic formats has been putting a bit of pressure on Google’s profit margins over the past year. Apple also said this quarter that Google would become the default web search option for Siri on iOS, a deal that has cost billions in the past.

Google also spent money on Google Cloud data centers, content for YouTube, and hardware-related costs, Porat said on a conference call. Headcount also jumped to over 78,000 people, up from nearly 70,000 a year ago, as the company hired more cloud engineers. Porat said the company intends to continue investing in these areas.

“Customers tell us they are switching to Google Cloud because of our prowess in data analytics, [and] our commitment to being an open platform,” Google CEO Sundar Pichai said.

While Alphabet’s Google business primarily makes money through advertising, it also contains Google Shopping, Maps, YouTube, Android, Chrome, Google Play, virtual reality and cloud services.

Google’s “other” revenues, which includes hardware sales, were $3.45 billion during the quarter, up from $2.43 billion a year ago. Google launched its Pixel 2 phone this fall and has expanded options for Google Home and Google earbuds. And Google also agreed to buy part of HTC for $1.1 billion.

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