Alphabet's higher spending worries investors, shares dip
SEE ALSO :Google fined Sh5.7b over GDPR failuresThe company reported $31.07 billion in total fourth-quarter costs and expenses, up 26 percent from last year. Capital expenditures rose 64 percent compared to last year, up to $7.08 billion. Spending was pushed higher by Google boosting staffing on its cloud computing division, promoting its consumer devices and YouTube subscription packages and acquiring office buildings in Silicon Valley and New York City. Alphabet Chief Financial Officer Ruth Porat told analysts that capital expenditures would moderate significantly this year, but the company would continue to invest in long-term bets on artificial intelligence services, consumer hardware and emerging markets. REVENUE, PROFIT BEATS Alphabet’s fourth-quarter revenue rose 22 percent from a year ago to $39.28 billion, compared with Wall Street’s average estimate of $38.93 billion, according to IBES data from Refinitiv. About 83 percent of the revenue came from Google’s ad system.
SEE ALSO :What Sh5.7b Google fine can do for KenyaNO NEWS ON WAYMO Google’s mostly free search, video and productivity tools are used by billions of people across the world, despite a backlash in some countries over how the company uses and protects customer information. Investors concerned that Alphabet’s future growth, especially in emerging markets, will not match its previous rates, are looking to the company’s other businesses to provide new streams of revenue. But Alphabet gave away little new information on its other ventures on Monday. It gave no indication when its self-driving car company Waymo will generate noticeable revenue. In October, Alphabet said Waymo had begun revenue-generating rides within a small section of Arizona but did not break out the company’s financials. Pichai said Google’s cloud computing unit last year doubled the number of deals it struck worth more than $1 million. The cloud unit’s G Suite productivity product now has 5 million customers, he said, up from 4 million in last year’s first quarter.