Google CEO Sundar Pichai speaks at the Google I/O conference in Mountain View, Calif. Google pledges that it will not use artificial intelligence in applications related to weapons or surveillance, part of a new set of principles designed to govern how it uses AI. Those principles, released by Pichai, commit Google to building AI applications that are "socially beneficial," that avoid creating or reinforcing bias and that are accountable to peopleGoogle AI Principles, Mountain View, USA - 08 May 2018

It may be Google’s 20th year in business, but it’s been a high-stress period plagued by an array of issues — from data breaches to antitrust penalties — and the turbulence didn’t end with its latest earnings results, released Thursday.

The tech maker topped earnings expectations, but missed the mark on revenue.

During the three months between August and September 2018, parent company Alphabet Inc. reported $27.77 billion in revenue, falling short of analysts’ expectations of $34.04 billion. The numbers rattled Wall Street, which sent the stock up more than 4 percent ahead of the results before plummeting as much as 5 percent in after-hours trading.

Not that all the news was bad. The tech conglomerate pulled in earnings of $33.74 billion, and Google, as Alphabet’s main business, shattered expectations on earnings per share. Results shot past the EPS forecast of $10.42, reaching $13.06. Earnings clocked in at $33.74 billion and the net profit was $9.19 billion.

Google’s advertising business surged more than 20 percent in the quarter, compared with last year. Ad revenue amounted to $28.95 billion. This growth was “led by mobile search with a strong contribution from YouTube, followed by desktop search,” Ruth Porat, chief financial officer of Alphabet and Google, said on the call.

How that might change, however, is up in the air. In Europe, Google’s practice of tying Android, Google apps like the Play Store and Gmail, and Chrome attracted scrutiny leading to a hefty fine of $5 billion for antitrust violations. The model brings in a massive revenue stream for the company, so naturally it’s appealing the decision.

Google’s traffic acquisition costs — the amount Google pays sites to host ads — jumped 19.6 percent to $6.582 billion. Revenue from Google-owned channels, principally its search engine and YouTube, grew 22 percent to $24.05 billion.

As for how it plans to continue driving growth, Google will focus on several areas across its ad business, software development, cloud operation, hardware and partnerships.

Google chief executive officer Sundar Pichai called out Shopping Actions more than once, and the company’s partnerships with the likes of Nike, Best Buy and Sephora.

“We are continuing to invest there and we are also driving strong partnerships with the retail sector both in terms of our shopping experiences as well as through cloud,” Pichai said. “And I think that continues to be a big opportunity.”

Other focus areas for the company are on game streaming, responsive YouTube video ads, its Waymo self-driving car technology and Pixel hardware — including the Pixel 3 and 3 XL. The phones offer one of the best cameras on the market today, because of the tech giant’s development efforts in artificial intelligence.

Going forward, Google plans to double down on AI and machine-learning.

“We see an opportunity to apply that across a set of important areas,” Pichai added. “There are a lot of opportunities ahead of us. We are pretty disciplined about where we’re focused on and we’re focused on real large opportunities.”

load comments
blog comments powered by Disqus