Alphabet advertising revenues jumps 21.4% driven by mobile

Alphabet published its Q3 2017 results late last week, beating investor expectations with strong results. Shares jumped 5% following the news.

Total revenue grew to $27.77 billion, up from $22.45 billion, representing a 23.7% growth. Net income jumped 33% to $6.73 billion.

The majority of the company’s revenue and operating profits came from Google’s portfolio of Search, Chrome, Android, YouTube, Play and Gmail.

Overall, Google’s advertising business is on a roll, with ad revenue increasing 21.4% the year over to $24.06 billion. Sales across the company’s ad portfolio grew to $19.72 billion, driven by mobile search ads, YouTube ads and desktop search. Meanwhile, ad revenue across network member sites jumped 16.3% to $4.34 billion.

Sundar Pichai, CEO of Google, addressed a series of concerns about advertising on YouTube following the extremist content scandal at a conference call.

“We’ve been doing a lot to protect the ecosystems and do the right things for advertisers and users,” Porat said. “The overwhelming majority of advertisers never left. And those who did – many are already back on the platform.”

Pichai added that programmatic advertising technology had worked well for Alphabet.

At the same time, Google said that non-advertising products grew 40% the year over to $3.405 billion, led by strength across Cloud and Play entities.

As Alphabet reaches its highest growth rate for ad revenue in almost five years, it’s likely that the pace will be slowing down. In addition, Google faces stiff competition from Facebook, particularly on mobile.

Investors have been getting worried about Google advertising since it pays other companies such as Apple to integrate Google Search and other products. However, Pichai defended the deals saying that they are a “win-win”, because both sides profit when each partner is performing well.