Alphabet posted revenue of $32.657 billion (+26 percent) with net income of $3.195 billion in Q2 2018.
Alphabet’s Google generated $4.425 billion revenue from other areas including Cloud in Q2 2018 against $3.241 billion in Q2 2017.
Google is currently facing a $5 billion plus fine due to its dominance in online advertising and the miss-use of Google Android software. Google will be approaching court to remove the penalty by European Union.
Government pressure to improve moderation of user-created content has forced Google to hire more analysts. YouTube, a Google-owned streaming service, has increased spending on video content to keep consumers from shifting to offerings from Netflix and expanding media conglomerates such as AT&T, Reuters reported.
Google CEO Sundar Pichai told analysts that investments in artificial intelligence software meant to better predict where to place ads are making its services more attractive to advertisers. The company is selling more ads as its YouTube video service and Google search grow globally, he said.
Profit margins have dipped as more ads get shown on mobile devices, where Apple and other firms charge fees to distribute Google search on their devices and apps.
Google in the second quarter entered the second year of its latest multi-year deal with Apple, which analysts said helped even out costs.
Operating margin rose to 24 percent from 22 percent last quarter, excluding the $5 billion antitrust fine issued last week by the European Commission over Google’s anticompetitive licensing of Android software. The margin was down from 26 percent a year ago.
The newer businesses are sucking up investments as Google adds data centers and employees to support them. Alphabet CFO Ruth Porat told analysts on Monday that the advertising unit is also getting new capital.
Alphabet, Facebook and other application makers have become big forces in advertising as consumers globally, and in turn, advertisers devote increasing attention to smartphone and TV apps instead of newspapers and traditional TV broadcasts.
Pichai said the company had opportunity to show ads on Google Home smart speakers and Google Maps and was slowly determining the best way to do so.