Google paid $7.4 billion to acquire traffic during the fourth quarter

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A booming digital advertising market lifted Google's fourth-quarter advertising sales by a fifth and helped Alphabet, its parent, to beat Wall Street's profit and revenue forecasts last night.

Alphabet's Other Bets business, which includes its self-driving auto company Waymo and health-tech venture Verily, saw revenue rise to $154 million, up from $131 million in the year-ago period.

Overall, Google's revenue for the quarter was $39.1 billion, up 22% from the $32.2 billion recorded during the 2017 fourth quarter.

Revenue jumped 21.5pc to $39.28bn.

Pichai highlighted YouTube as one of the company's success stories, saying the number of YouTube channels with more than 1 million subscribers almost doubled in 2018.

Google is now hosting a call with investors. YouTube numbers are buried inside Google, while cloud and hardware results are part of Google's Other revenues line.

Google faced scrutiny in late 2018 over alleged bias against conservatives on its signature search engine, as well as the decision to provide Android co-founder Andy Rubin $90 million in severance pay after he was sacked amid sexual misconduct claims - sparking a global protest among employees.

Porat said increased operating costs stemmed from licensing content for YouTube, expanded data center operations and Google's hardware business.

Costs were also pushed higher by hiring, mostly for the cloud business, she added during a conference call with analysts.

All eyes are on Thomas Kurian, the recently hired cloud services executive who's attempting to turn the Google Cloud Platform into an enterprise business.

But the company's profitability continued to fall in the quarter.

Alphabet (NASDAQ:GOOG) drops 2.5% aftermarket on Q4 results that beat EPS and revenue estimates with a 22% Y/Y revenue growth.

Despite Google's operating losses in the category for its side businesses such as Waymo and Verily, the company did manage to make gains in terms of total revenue flow - moving up to $154 million from $131 million the previous year.

How well Google fares with investors will depend on how aggressively the tech giant tackles cloud computing services in the next year, either organically or through acquisitions. It was the lowest growth rate in the company's short history, and the company has many challenges to keep growing, but it turns out that Facebook keeps making bank because its ads work and the company is willing to plaster them all over its internet hangouts. It's also seeing an "uptick" in $100 million contracts, Porat said.

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