Alphabet Misses But Google Assistant Gets Updates


Alphabet, the parent firm of Google, delivered fourth-quarter results that disappointed investors, at least as far as their bottom line was concerned. While the company beat Wall Street’s revenue expectations, it fell short on earnings expectations.

Still, Alphabet showed traction in online advertising, which saw revenue growth of 22 percent in the fourth quarter compared to last year, and its cloud business, which has become a "billion dollar per quarter business,” Google CEO Sundar Pichai said Thursday (Feb. 1) on the company’s earnings call.

Earnings of $9.70 a share fell short of previous estimates of $9.98; that bottom line dropped 4 percent, as revenue growth was up 24 percent year over year, coming in at $32.3 billion.

Drilling down into the top line a bit, advertising revenue was 84 percent of sales, growing by about 22 percent year over year and ending at $27.22 billion. Paid clicks gained 43 percent, even as costs per click were down 14 percent.

TAC, or traffic acquisition costs, comprised 24 percent of the advertising revenues line, up 33 percent year-over-year.

The “other revenues” line, which includes sources such as its enterprise business, hardware sales and the company’s app store, was up 38 percent at $4.69 billion. As for “other bets,” which includes emerging technologies such as Alphabet’s Nest and Verily, sales were up 56 percent to $409 million, and operating losses were softened a bit, to $916 million from $1.08 billion. That number exceeded Nasdaq’s consensus estimates of $362 million.

Going forward, Google plans to become an artificial intelligence (AI)-focused company to power products such as the Google Assistant, which, for example, powers LG's smart speakers.

The assistant allows users to set an alarm and wake up to a particular song, playlist or radio station. It also now pairs with Netflix and Google Play, according to a Google announcement.

Pichai also said that Google is investing heavily in its cloud, YouTube and hardware business lines. “These bets are enormous … and already they are showing real momentum and are gaining traction,” Pichai said on the call, adding that he believes Google is the world’s fastest-growing major public cloud provider, based on publicly reported data for the 12 months ending in 2017.

Some Killer Stats:

4Q Revenues: $32.323 billion

4Q Revenue Growth: 24 percent

Emerging Technologies Sales Growth (Other Bets): 56 percent (year over year)

“Other Revenues” growth (includes smartphone and cloud-based business): 38 percent



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