Alphabet, Google’s parent company, had a pretty great quarter, as far as investors are concerned. The company reported its second-quarter earnings today (July 28), and the stock price was up about 5% in after-hours trading at the time of publishing.
The company reported revenue of $21.5 billion, up 21% from the same quarter last year, far outstripping what analysts had been expecting, according to MarketWatch. Its operating income was also far above expectations—the company reported taking home $4.87 billion, compared to $3.93 billion in the same period last year.
Google’s advertising revenue is still growing
Nearly all of of Alphabet’s revenue comes from Google, and the vast majority of its subsidiary’s revenue comes from its advertising business, whether that’s banner ads on websites, text ads on Google searches, or ads on YouTube videos. And it seems that Google’s core business is still growing healthily. Google’s revenue was $21.3 billion for the quarter, up 21% from a year earlier.
Everything else is still just a money pit
In recent years, Google has been pouring money into new divisions, new investments, and new acquisitions, ostensibly all of which are designed to help the company suss out new ways to make money that aren’t tied to search and advertising.
It’s been a year since Google reorganized itself into Alphabet, a holding company that essentially separated the company’s profitable search and advertising business from its more outlandish experiments and newer ventures, which it calls “Other bets.” And, rather unsurprisingly given the last few quarters, those bets have not really generated much revenue. They pulled in a meager $185 million this past quarter, and lost $859 million on the quarter—about $200 million more than the same period last year.
It remains to be seen whether Alphabet will be able to create any real revenue streams beyond advertising, but at least for the time being, Google’s core business is still healthy, even with the inroads that Facebook is making to the market it dominates.