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Alphabet's Traffic Acquisition Costs Making Analyst Nervous

Traffic Acquisition Costs (TAC) -- payments to other Web sites -- rose 13.24% to $3.8 billion for the first quarter in 2016, making analysts a bit nervous. The amount comes to about 21% of total advertising revenue. The red flag rose for analysts when the one-off deals that Google strikes to make sure that its search engine is the default option on devices like the iPhone rose 33% year-over-year. Alphabet CFO Ruth Porat addressed the trend, saying Google's growth strategies like mobile and programmatic advertising have higher acquisition costs, but Wall Street kept digging for details. Business Insider explains.

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