Why Google shrugs off a $2bn loss

Google’s advertising business made an operating profit of $9.57 billion in the last quarter.

GOOGLE’S digital-ad business is so profitable that its new parent company, Alphabet, can lose nearly $2 billion on risky ventures — and shrug.

On Monday, Alphabet Inc. released its first quarterly earnings report since Google reorganised itself under the new company. Net income exceeded analyst estimates for the quarter, sending Alphabet shares up nearly 7 per cent in after-hours trading.

The earnings release spelled out the cost of running mostly experimental businesses that aim to do everything from eliminating the human driver to curing cancer. Those operations posted an operating loss of $1.69 billion ($US1.2 billion) on revenue of $212 million ($US151 million) in the final three months of last year.

Google, meanwhile, produced an operating profit of $9.57 billion ($US6.8 billion) on revenue of $29.83 billion ($US21.2 billion), driven by strong sales of advertising on mobile devices and YouTube.

Alphabet’s quarterly profit rose five per cent to $6.92 billion ($US4.92 billion), while revenue for the California-based internet colossus topped $30.01 billion ($US21.33 billion), a rise of 17.8 per cent.

Alphabet shares jumped nearly seven per cent to $US798.

Electronic screens post the price of Alphabet stock.Source:AP

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