Google’s advertising revenue continues to grow, but the $2.7 billion EU antitrust fine has almost halved Alphabet’s second quarter profits.
Taking the fine into account, Alphabet’s net income was $3.5 billion, rather than the $6.2 billion it was anticipating.
As well as the 28 per cent decline in quarterly profit, concern over the company’s rising costs pushed its shares 3 per cent lower in after hours trading yesterday.
Alphabet’s total revenues were $26 billion for the second quarter, up 21 per cent year-on-year.
Google’s advertising business continues to account for the lionshare of Alphabet’s business. Ad revenue reached $22.67 billion in the three months ending June 30.
During its earnings call Google made no reference to advertisers boycotting YouTube earlier this year over brand safety concerns, which appears not to have had a lasting impression on the online video service.
Alphabet CFO Ruth Porat said YouTube and mobile search were the biggest contributors to growth this quarter.
“Advertising revenues benefitted from the strong performance insights, which was led in particular by tremendous results in mobile search with a strong contribution from YouTube,” Porat said.
Google CEO Sundar Pichai said YouTube is now infiltrating living rooms around the world.
“The fastest growing stream for YouTube is in the living room,” Pichai said.
“YouTube watch time on TV screens has nearly doubled year-on-year. This quarter we unveiled six new ad supported YouTube originals from celebrities including Ellen DeGeneres and Kevin Hart, and YouTube creators like Rhett & Link.”
According to Pichai, YouTube now has 1.5 billion monthly viewers and people watch on average 60 minutes a day on their phones and tablets.
Google’s online advertising revenue is expected to reach $90 billion by the end of the year. Last year its full year ad revenue amounted to $79.4 billion, surpassing total advertising expenditure in all countries except for the United States, according to analysis by Statista.