Google’s growth stalled

Revenue from Google’s parent company, Alphabet, jumped 21 percent to $ 33.74 billion in the third quarter. But this performance, worse than last year, exceeds market expectations.

Google

A bit like Amazon, which published its quarterly results Thursday night, Alphabet sees its insolent growth mark the pace. For the first time in two years, Google’s parent company disappoints analysts. Alphabet’s revenue climbed by 21% to reach $ 33.74 billion in the third quarter. The performance remains outstanding for the number one online advertising. However, it marks a relative slowdown compared to the 24% growth posted at the same time last year.

All categories combined, Alphabet’s quarterly profits are up 37% to $ 9.19 billion. The performance exceeds analysts’ expectations. However, they find that Google’s market shares in advertising are crumbling, while the payments made by the company to its partners like Apple, so that they direct users to its platforms, continue to increase . They now account for 13.1% of revenues from its websites. The transition from Alphabet to a model less dependent on advertising is all the more necessary in Europe, and perhaps also soon in the United States, regulatory authorities intervene to limit the means to monetize the data collected by Google to internet users and smartphone users.

Alphabet continues to invest massively the profits it generates – from advertising messages broadcast on its research sites or on Youtube for example – in the development of other services that do not depend on advertisers. Capital expenditures at the Menlo Park business in California climbed 49 percent in the third quarter to $ 5.2 billion. Alphabet’s growth in “non-advertising” services which, besides the cloud, includes for example the production and sale of “Pixel” smartphones, or its subsidiary Waymo, which works on the development of an autonomous car, is 29%. But this division’s sales are still only $ 4.6 billion.

Following the fall of one sixth of the value of its stock in three months, Alphabet has appreciated only 4.7% since the beginning of the year. Much of this increase is likely to fade at the opening of Nasdaq today. On the over-the-counter market, after the close on Thursday night, the stock fell by nearly 4% in reaction to the relatively disappointing quarterly results.

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