Google parent Alphabet sees profits jump 73pc on advertising boom
Google's parent company Alphabet saw profits soar 73pc in its first quarter, thanks to an increase in advertising income, with no sign that privacy concerns were starting to feed through to its bottom line.
Alphabet said it generated $31bn (£22.2bn) in revenue in the three months to March 31, pushing net income up 73pc to $9.4bn.
Around 85pc of its revenue came from advertising in the period, equal to $26.6bn, while its 'Other Bets' division, which includes businesses such as its Waymo self-driving firm, posted revenue of $150m, up from $132m a year earlier.
However, although the results beat analyst expectations, Alphabet's operating profit margin dipped to 22pc from 27pc a year earlier, causing shares to seesaw in extended trade, jumping as much as 4pc before falling back down to trade up 0.4pc.
It comes amid mounting concerns in the wider tech industry over user privacy, in the wake of the Cambridge Analytica data revelations.
Technology companies are currently preparing for the introduction of the European Union's General Data Protection Regulation next month, which will give users greater control over their data, but could affect how businesses such as Google target adverts at users and use bought-in data from advertisers and publishers.
Google chief executive Sundar Pichai said the group started working on GDPR compliance "over 18 months ago" and that it has been working "very closely with advertisers and our partners" on meeting requirements on May 25 and in the long term.
The latest results also come less than a week after Google-owned YouTube faced renewed criticism from advertisers, after it emerged that it was running adverts from major brands alongside content prompting paedophilia and Nazism.
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YouTube said at the time that it had "partnered with our advertisers to make significant changes to how we approach monetisation on YouTube with stricter policies, better controls and greater transparency.
"When we find that ads mistakenly ran against content that doesn't comply with our policies, we immediately remove those ads. We know that even when videos meet our advertiser friendly guidelines, not all videos will be appropriate for all brands."
Last year, it was forced to refund advertisers after paid-for-clips appeared alongside extremist content.
Alphabet said paid clicks on Google properties rose 59pc year on year in the first quarter, while cost-per-click dipped 19pc.
Ruth Porat, chief financial officer of Alphabet and Google, said: "Our ongoing strong revenue growth reflects our momentum globally.
"We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence."
