Google's mobile and video business drives Alphabet's Q3 earnings

Google's surge in advertising on mobile and video-sharing platform YouTube, helped parent company Alphabet post better-than-expected results for Q3 2016. The company recorded $5.1bn (£4.1bn) in net income for the third quarter ended 30 September, up 27% as compared to the $3.9bn it earned in the same period a year ago.

The tech giant posted earnings per share of $9.06 on revenues of $22.45bn, beating analyst expectations of $8.63 a share, on revenues of $22.05bn.

CFO Ruth Porat was pleased with the results and noted that although mobile search and video powered the core advertising business, the progress of newer businesses in Google and Other Bets were also good. The firm also announced a new share buyback of $7bn.

Two numbers crucial to Google's earnings each quarter are cost per click – how much Google charges for its ads – and paid clicks, how many times people click on those ads. For this quarter, the aggregate paid clicks were up 33% versus an expected 26%, a 9% change from a year ago. But cost per click was down 11%.

Google's ad revenue alone contributed to 89.1% of total revenue.

Commenting on the earnings Norm Johnston, global chief strategy & digital officer at Mindshare Worldwide told IBTimes UK, "Overall a strong showing from Alphabet driven by its two Google growth engines of YouTube video and search. Importantly mobile search seems to have hit a long anticipated inflection point where the volume in paid clicks is making up for declining cost-per-click."

However, Alphabet's Other Bets generated meagre revenue of $197m, primarily from Nest, Fiber and Verily units. The company declared this week that it will pause the roll-out of its Fiber services in some US cities.

Elaborating on the company's Other Bets, Johnston cautioned, "Google's 'Other Bets' only remain an inspirational brand high note for publicity. Alphabet must question how long it's current cash cow advertising business can continue to support its loss-making long-term moonshot ambitions."