Google Parent Alphabet Q1 Revenue Surpasses $20B With Growth In Mobile Search

Google's properties' share of revenue grew much more than its partner sites during the first quarter of 2017.

Parent company Alphabet reported Thursday that Google's own sales from services now contribute more than 80% of the ad revenue generating $17.4 billion in the quarter -- up from $14.3 billion in the year-ago quarter. Revenue from advertising also climbed to $21.4 billion, up from $18 billion.

The increase in Google's revenue from its sites "reflects healthy growth in mobile search," Alphabet CFO Ruth Porat said on an analyst and investor call.

In aggregate, the cost per click in the quarter fell 21%, compared with the first quarter of 2016. CPCs on Google properties fell 21%, and network members by 17%.

Crealytics CEO Andreas Reiffen isn't surprised to see a continued decline in CPCs, but "what’s interesting is that even as click value decreases, Google continues to show growth in its overall advertising revenue."

Reiffen believes the decline is likely due to a rapid increase in mobile searches, the growing number of available ad units on the results page, and the move toward visual product listings, where the image of the product is presented rather than the traditional three lines of text.



Alphabet reported in the first-quarter earnings report that it refined Google's method for paid clicks and cost-per-click to include additional categories of TrueView engagement ads and exclude non-engagement-based trial ad formats. The change resulted in a modest increase in paid clicks and a modest decrease in cost-per-click, according to the earnings report.

Along with earnings, Google/Alphabet co-founders Larry Page and Sergey Brin released the 2016 Founders Annual Letter to shareholders. "Sergey and I are having a good time looking for new opportunities and managing and scaling our existing efforts," Page wrote in the letter. "I still see amazing opportunities that just aren’t quite fully developed yet — and helping making them real is what I get excited about."

Page paced through updates to Alphabet's projects and companies, admitting that oversights have been easier with the change to Alphabet from Google nearly two years ago. "I also think we have learned a lot about how to set up new companies with a structure for success," he wrote. "… "We’re not going to invest if we don’t see great opportunities and we feel like our track record for picking some important efforts long before others is pretty good. Machine learning and all the efforts around Google Brain and DeepMind are good examples."






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