Parent company Google makes more profit despite loss of experimental division

Google parent company Alphabet posted a profit of $5.43 billion in the first quarter of 2017, which is 29 percent more than in the same period last year. This profit increase came about despite an increasing loss of the experimental division.

This experimental division of ‘other bets’ includes business units such as smart home manufacturer Nest, internet provider Google Fiber, medical company Verily and self-driving car company Waymo. The quarterly figures show that ‘other bets’ revenue in the first quarter came in at USD 244 million, an increase of almost 48 percent compared to the first quarter of 2016. The operating loss was USD 855 million, an increase of $855 million. ten percent.

This experimental division remains a cost item for Alphabet. In the fourth quarter of 2016, this unit recorded a loss of $1.24 billion. In the same period of 2015, the loss was $1.08 billion. For the full year 2016, the division suffered a total loss of $3.6 billion, with total sales of $809 million. In 2016, the company spent 7 percent of its total operating costs on other bets.

These costs are more than made up for by Google, which includes Android, Search, YouTube, Apps, Maps and Ads. Google’s ad revenue posted revenue of $21.4 billion in the first quarter, up from $18 billion in the same period in 2016. Total digital advertising revenue has doubled since 2012, but according to an analyst, Google held 35.9 percent of the market five years ago, up from 32.8 percent in 2016, according to The New York Times.

Alphabet’s cloud services are lagging behind Amazon and Microsoft in terms of size, but the revenue of the part that houses the cloud services rose significantly by 49 percent to almost $ 3.1 billion. According to Alphabet, this is one of the fastest growing parts. Alphabet’s total revenue in the first quarter was $24.75 billion, an increase of 22 percent.