Alphabet's Q3 Earnings Highlight Strong Mobile, Programmatic Performance

Wasn’t it just earlier this week that The Guardian’s Charles Arthur crunched some numbers from Google to show that 50% of mobile users don’t use their devices to search at all?

Apparently that number has had no effect on revenue this quarter. Whether people are searching more on their devices individually, the sheer volume of searches has pushed search traffic on mobile devices above desktop worldwide.

"The key highlight this quarter was the substantial growth of our mobile search revenue, complimented by ongoing strong contributions from YouTube and our programmatic business," said Ruth Porat, CFO of Alphabet and Google during an earnings call. Six Google products including Search, Android, Chrome, Maps, YouTube, and Google Play, now have 1 billion users globally.

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According to the earnings report, paid clicks rose 23% compared with 18% in the previous quarter. Some analysts are predicting that mobile clicks will equal desktop's soon, and that mobile ad pricing will be comparable to desktop.

Google has made some adjustments recently to their mobile strategy, showing tweets in mobile search results, and introducing deep links for mobile apps to surface mobile content during search.

In addition, programmatic advertising is “on fire” for Google, stated Google CEO Sundar Pichai. He said 80% of the top 100 advertisers buy programmatically from Google, and programmatic ad revenue has nearly doubled in the last year.

Arthur’s analysis reveals a potential weakness in Google’s search armor, especially as the market transitions to a mobile-first mind-set. Google executives appear to have reframed it as an opportunity, since the company beat market expectations, with mobile search and programmatic advertising largely driving that growth.

Google’s shares opened at a record high today. Some of that credit is due to a share buyback. The board of directors of Alphabet authorized the company to repurchase up to $5,099,019,513.59 of its Class C capital stock—not all at once, of course. (That number corresponds to the square root of 26, the number of letters in the alphabet.)

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