Google’s mobile ad push is paying off

Georgia Gov. Nathan Deal speaks during a ceremony announcing a $300 million expansion of Google’s data center operations in Lithia Springs, Ga.
Image: Associated press/David Goldman, File

Google and Facebook currently have a near-duopoly stranglehold on the mobile ads market.

But the trajectory of each company’s growth in the sector has worried some of the search giant’s investors, who see the social network eating into Google’s share of the business.

Thursday’s earnings release from Google parent Alphabet, however, suggests the company’s efforts to turn this situation around have been at least partly successful.

The Mountain View company reported earnings and revenue on Thursday that surpassed Wall Street’s already-rosy estimates.

Google pulled in revenues of $22.5 billion and earnings per share of $9.06, beating the Thomson Reuters consensus predictions of $22.1 billion and $8.64 respectively.

Executives credited the boost to its mobile ads business particularly strong forward momentum in mobile search and YouTube ad sales.

Research firm eMarketer estimates that 60 percent of Google’s ad revenues will come from mobile this year, up from 46 percent last year. Meanwhile, Facebook derives a whopping 82 percent of sales from ad on smartphones.

As of last fall, the firm’s analysts say Google still owns a larger chunk of the mobile market 32 percent versus 19 percent but Facebook’s slice is expected to continue to rapidly grow, while Google’s is projected to stagnate.

Google is still primarily an advertising business, the largest on the internet, but it also has its fingers in several other pies, including subsidiaries, hardware sales and pet ventures.

The company launched a new line of devices earlier this month including its first-ever smartphone, the Pixel leading some to even speculate whether Google was turning into a hardware company (It’s not, according to these numbers).

Google didn’t break out specific numbers on pre-order sales for these products, and in many respects it’s still too early to gauge their success.

The company has also been trimming down some of its more ambitious bets in a bid to tighten focus on its core business.

Google announced Wednesday that it would lay off members of its Fiber division a massive undertaking to lay optics cables that would bring internet access to households as it switched to more efficient wireless methods.

It also recently spun off its driverless car business into a separate entity within the Alphabet umbrella.

Read more: http://mashable.com/2016/10/27/alphabet-google-earnings-third-quarter/