Google's parent company reported fourth-quarter earnings yesterday that topped expectations across the board. But the dual threats of rising costs and growing competition were enough to sink shares about 3% after hours.
Revenue surged about 21% annually to $39.3 billion—and given that it represents such a giant portion of sales, we're not surprised that advertising revenue also grew 20% to $32.6 billion.
But it didn't come cheap.
Traffic acquisition costs (aka the fees Alphabet pays to other companies to be their default search engine) totaled $7.44 billion, up 15%.
And capital expenditures came in around $7 billion for Q4, up 80%.
Plus, cost per click on Alphabet properties (or what the company charges advertisers) fell 29%. Remember, Alphabet's been navigating an increasingly competitive digital ad landscape. Does anyone know who invited Bezos?
Bottom line: That drop in advertising costs could spook investors worried Alphabet's losing its pricing power gusto. Still, it was a (mostly) satisfying ending to a string of (mostly) impressive Big Tech earnings.
via Morning Brew