\n
![](\"https:\/\/i0.wp.com\/www.rsoftsolution.com\/blog\/wp-content\/plugins\/RSSPoster_PRO\/cache\/53dbb_a3c4057e7d804c79b4bfb3278f4afced.jpg?w=640\")
<\/p>\n
\n<\/p>\n
Alphabet\u2019s strategy of trying to stuff the difference between declining mobile advertising value with additional clicks appears to still be paying\u00a0off as the company once again showed Wall Street that it can make a ton of money and continue to grow.<\/p>\n
Alphabet (we\u2019re just gonna call it what it is because we\u2019re talking about the core business: Google) reported earnings of $9.06 per share on revenue of $22.4 billion. That\u2019s another 20 percent gain compared to the same quarter a year ago.\u00a0Wall Street was looking for earnings of $8.64 per share on revenue of $22.05 billion.<\/p>\n
Google\u2019s business was for some time called into question because the value of advertisements on mobile was not as high as on desktop \u2014 specifically desktop search \u2014 which was Google\u2019s sweet spot. Indeed, Google\u2019s cost-per-click, a key metric determining the value of an ad, fell another 11 percent year-over-year this quarter. But aggregate paid clicks increased 33 percent in the third quarter year-over-year, showing it\u2019s still able to compensate for that decrease. In the last quarter, Google\u2019s cost-per-click fell 7 percent compared to the second quarter in 2015, and cost-per-click was down 5 percent quarter-over-quarter.<\/p>\n
Still, it\u2019s going to remain a question mark for some time as its cost-per-click continues at a double-digit decline. Google has to get its ads on as many devices and in as many mediums as it possibly can \u2014 whether that\u2019s through a voice-driven speaker, its own phone where it can control the experience or pushing its services across as many devices as it possibly can. Wall Street may tolerate that decline for the time being, but it\u2019s going to have to taper off at some point if Google is going to show it\u2019s going to be a strong core business.<\/p>\n
For now, because the company\u2019s\u00a0strategy is working, and that last quarter the company showed it could continue to work, it looks like Wall Street is happy. The stock isn\u2019t going ballistic \u2014 it\u2019s up about 2 percent \u2014 but it\u2019s not on a wild swing down right now, either.\u00a0In addition, Google is also authorizing a roughly $7 billion share repurchase program, in another move that is going to return additional value to its\u00a0overlords\u00a0on Wall Street.<\/p>\n
As the years have passed, Google has gone from one of the only online advertising juggernauts to going head-to-head with Facebook, whose advertising business is rapidly expanding and offering a good alternative to Google. Both perform really well at different parts of the marketing funnel \u2014 Facebook is great for brand awareness while Google is good for capturing purchase intent with search \u2014 but they\u2019re increasingly competing with each other for advertising dollars.<\/p>\n
And that\u2019s also not to mention emerging platforms like Snapchat which, while it isn\u2019t necessarily a threat to Google\u00a0yet<\/em>, represents a potential additional advertising platform that could suck away the dollars Google is hoping to acquire as it tries to further expand its advertising business. Snapchat\u2019s valuation may reach as high as $35 billion in an upcoming IPO<\/a>, and it previously projected it would hit $1 billion in revenue in 2017.<\/p>\nSo while Alphabet\u00a0has been trying to rapidly roll out new devices and markets, like Google Home and the Pixel, all eyes are still going to be on its advertising business for now \u2014 which is staggering. In fact, questions about the company\u2019s advertising growth were at the time largely stamped out when it delivered a tremendous second quarter<\/a> that showed that it could continue to grow that business.<\/p>\n