Google’s parent company Alphabet reported its Q1 revenue on Monday, scoring $31 billion in total revenue, and $9.4 billion in net income. Alphabet’s revenue this quarter was 26 percent higher than the same quarter last year.
A major boost to Alphabet’s income this quarter was due to a change in accounting rules related to equity or share holdings in other companies, such as Uber. The accounting change allowed Alphabet to realize some of its share holdings at market value, rather than the value at which it had invested in the company.
Revenues from advertising were $26.6 billion, of which Google’s revenue from its own properties was just short of $22 billion, and from member sites $4.6 billion. Google’s other revenues, which include its cloud business, hardware business, and entertainment and media services through Google Play totaled $4.3 billion, representing 14 percent of Google’s entire business. Alphabet’s “Other Bets” division, which sits outside the main Google company, accounted for $150 million in revenue, and lost $571 million for the quarter.
Continuing a common trend, pay-per-click edged lower, but paid clicks on Google properties were higher, overall increasing revenue. Ruth Porat, CFO of Alphabet, said in the company’s earning call that the advertising growth was “led again by mobile search, complemented by solid growth from desktop search, and strong performance from YouTube.” Analysts estimate that YouTube might make anywhere from $10 billion to $20 billion in total revenue this year.
Alphabet shares dropped on Monday and Tuesday as investors realized that Google’s expenses would grow faster than revenue, at least for 2018. Google continues to keep hiring and investing in buildout of its data centers to compete against market leader Amazon in the growing cloud market.