Google’s parent company, Alphabet, posted $22.5 billion (£18.5 billion) in total quarterly revenues for the third quarter of 2016 and comfortably beat expectations from Wall Street. The tech giant said that mobile search and video content had been key to its success in advertising as it posted overall revenues that grew 20 per cent year-on-year.
When taking a closer look at Google search, the report showed that aggregate paid clicks increased by nine per cent compared to the previous quarter and were up 33 per cent year-on-year, while paid clicks on Google websites surged by 42 per cent and 11 per cent respectively.
In contrast, aggregate cost-per-clicks were down by 11 per cent for the year and five per cent compared to the second quarter of the year and cost-per-clicks were down 13 per cent and six per cent for the same periods on Google websites. Traffic acquisition costs for the period were estimated to be $4.2 billion (£3.5 billion), which represents just over a fifth of total ad revenue.
Mobile search has been a primary driver for growth for a while, with Alphabet noting last quarter that its revenues had been boosted by the rise of ad spend and search queries on smartphones, and it is no different this time around. Video was also key in quarter three due to a strong contribution from YouTube, though desktop search also saw “decent growth” during the three months to September.
The bigger picture makes for welcome reading for Alphabet, as its total quarterly revenues climbed to $22.5 billion (£18.5 billion) with ad revenues amounting to $19.8 billion (£16.3 billion) of that figure. Meanwhile, “Other Bets” such as learning thermostat Nest and broadband Fibre created $197 million (£162 million), which is an increase compared to the same time last year. Google now has just over $83 billion (£68 billion) in cash and cash equivalents, with 60 per cent of that located overseas.
“We had a great third quarter, with 20 per cent revenue growth year-on-year and 23 per cent on a constant-currency basis. Mobile search and video are powering our core advertising business, and we’re excited about the progress of newer businesses in Google and Other Bets,” Alphabet CFO Ruth Porat said in a press release announcing the results.