Google Revenue and Income Rise as Mobile Contribution Grows

Company Battles to Remain Relevant as Search Shifts to Handholds

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Revenue at Google grew to $18.7 billion in the third quarter, up 13% from the period a year earlier, its newly formed parent company, Alphabet, said Thursday.

Net income totaled nearly $4 billion, up from $2.8 billion a year earlier.

The results pleased Wall Street, where analysts had predicted revenue closer to $18.5 billion, according to Reuters, as did the company's announcement that it will buy back nearly $5.1 billion worth of stock.

Paid clicks on Google ads across both Google's sites and elsewhere on the web rose 23% year-over-year, but the cost per click declined 11%.

Perhaps most importantly for the future, however, the company said it saw "substantial" growth in mobile search, complemented by contributions from YouTube and programmatic advertising. "Internally, all of our objectives are focused on mobile," said Google CEO Sundar Pichai.

Total advertising revenue came in at about $16.7 billion, fueled by the rise in mobile search ad revenue. Google said in May that mobile search had surpassed its desktop search in the U.S. and 9 other countries, and on Thursday Mr. Pichai said that was true worldwide.

The company is aggressively increasing its mobile search efforts by indexing apps, where consumers spend the vast majority of their time using smartphones. During Thursday's earnings call, Mr. Pichai said 40% of all mobile searches now return indexed app results. The company now has 100 billion deep links within the app ecosystem, it says, and that number is only growing.

According to the Interactive Advertising Bureau, mobile advertising now makes up 30% of all digital advertising revenue.

YouTube revenue continued to grow, driven primarily by video advertising across TrueView and Google Preferred ad products.

The company did not take the opportunity Thursday to elaborate on its plans regarding YouTube Red, its newly announced paid subscription service.

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