Google’s parent Alphabet defied expectations to report a 20.2% rise in quarterly revenue on Thursday, while retail giant Amazon slightly missed predicted predicted forecasts due to spending on preparations for the holiday season.
Indicating an end to its record-breaking profits streak, Amazon reported profit of $252m or 52 cents per share, though analysts had predicted 85 cents per share. Revenues reached $32.71bn but are predicted to reach between $42bn and $45.5bn for the busy fourth quarter.
Alphabet meanwhile continues to dominate the fast-growing mobile advertising market, along with Facebook. The company has benefited from robust sales of advertising on mobile devices and on YouTube, and also said it would repurchase about $7bn of its Class C stock.
Shares of Alphabet, which is the world’s second largest company by market value, were up 1.6% in after-hours trading.
Google’s ad revenue rose 18.1% to $19.82bn in the third quarter, accounting for 89.1% of Google’s total revenue, compared with 89.8% of revenue in the second quarter.
Paid clicks rose 33%, compared with a rise of 29% in the second quarter. Paid clicks are those ads on which an advertiser pays only if a user clicks on them.
Cost-per-click, or the average amount advertisers pay Google, fell 11% in the latest period after dropping 7% in the second quarter.
Analysts on average had expected a decline of 7.9%, according to FactSet StreetAccount.
Per-click costs __have been falling as people shift to mobile devices from desktops. Because of the limited space, advertising on mobile devices is generally cheaper.
Research firm eMarketer has estimated that Google will capture $52.88bn in search ad revenue in 2016, or 56.9% of the global market.
Google’s Other Revenue, which includes the company’s increasingly important cloud business, jumped 38.8% after rising 33% in the second quarter.
The cloud business competes with services offered by market-leader Amazon, Microsoft and IBM.
Alphabet’s Other Bets generated revenue of $197m, but reported an operating loss of $865m. In the year earlier period, revenue was $141m and the loss was $980m.
Other Bets includes broadband business Google Fiber, home automation products Nest, self-driving cars as well as X, the company’s research facility that works on “moon shot” ventures.
The company’s consolidated revenue rose to $22.45bn in the three months to 30 September from $18.68bn a year earlier. Net income rose to $5.06bn. Alphabet’s shares __have risen 5.1% since the start of the year.
