Alphabet, Google’s parent company, posted significantly higher sales in the third quarter of this year. However, net profit fell sharply, partly due to a larger loss in the experimental division and significantly higher expenditure in production and distribution.
Alphabet’s quarterly figures show that revenue rose from $33.74 billion in the third quarter of last year to $40.5 billion in the past third quarter. However, profits have fallen sharply, partly due to a sharp increase in costs associated with the production and distribution of goods and services, increased expenditure in the marketing division and an increasing loss in the experimental division. Alphabet as a whole recorded a net profit of USD 7.07 billion, compared to USD 9.19 billion in the period from July to September of last year.
Revenue at this experimental ‘other bets’ division rose from $146 million a year ago to $155 million today, but on the other hand, the division’s operating loss in the past quarter amounted to $941 million. That was a loss of $727 million in the third quarter of last year. Incidentally, other bets have made much greater losses in the past, for example in the form of $3.6 billion at the end of 2015. The ‘other bets’ division includes business units such as the medical company Verily, internet balloon company Loon and Waymo, the company that focuses on autonomous driving technology.
The Google part, which revolves around online advertising revenue from various Google services such as YouTube and Search, is still going strong. Advertising revenue rose from $28.95 billion to $33.92 billion in the third quarter. This part of Alphabet is still responsible for the lion’s share of the total turnover.
The division called ‘other revenues’, which includes the Pixel phones and cloud services, had a turnover of $6.43 billion, while revenue in the third quarter of 2018 was still at $4.64 billion. . It is not clear how much revenue Google gets from hardware sales, as hardware sales are not separately indicated and hardware is not the only part of this division. In any case, the sales of the Pixel 4 have not yet been able to contribute to this, as this phone only came out in October. Google CEO Sundar Pichai previously indicated that his company will invest heavily in growing cloud services, which he sees as an important growth engine.