Google’s Earnings Beat Expectations, And YouTube Is A Big Reason Why

By 10/28/2016
Google’s Earnings Beat Expectations, And YouTube Is A Big Reason Why

On October 27th, Google parent company Alphabet shared its earnings report for the third quarter of 2016. One of the big stories out of that report concerns YouTube, the video site that recently celebrated its tenth anniversary as a Google subsidiary. According to Alphabet, video (along with search) was a big reason why the company beat analyst expectations over the previous three months.

According to Alphabet, it earned $5.1 billion during Q3 2016, a 27% increase over the same period last year. Total revenue, with payments to advertising partners excluded, rose to $18.27 billion. “We had a great third quarter, with 20 percent revenue growth year on year, and 23 percent on a constant currency basis,” said Alpahbet CFO Ruth Porat in a statement. “Mobile search and video are powering our core advertising business and we’re excited about the progress of newer businesses in Google and Other Bets.”

Porat noted that “YouTube revenue continues to grow at a very significant rate,” and as a result, analysts believe Google could increase its online video spending. Specifically, YouTube could start chasing more TV programming, with a recent deal between the video site and CBS portending those plans.

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In coming quarters, YouTube’s revenue is only expected to increase. 2017 is forecasted to be the year when digital advertising overtakes its TV counterpart worldwide, and YouTube is doing its part to ease along the shift. In the Alphabet earnings report, Google CEO Sundar Pichai noted that YouTube’s six-second bumper ads, introduced earlier in 2016, have thus far been a hit with brands.

Additional details about Google’s Q3 2016 earnings are available in an Associated Press report shared by multiple outlets.

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