The results of Alphabet, the parent company of Google, last night offered an eloquent picture of the conflict between the big names in the digital economy and Brussels. In the second quarter, the search engine achieved a strong increase in revenues (+21% to 26 billion dollars) and a good operating result (6,9 billion dollars against 5,9 billion a year ago), but , because of fine issued by the European Union, net income fell to 3,5 billion: -28% , the lowest since 2008.
Wall Street, after the publication of the closed stock market results, punished the stock with a sharp decline, around 2,5%. The one-off effect of the fine (absorbed in a single quarter) does not weigh as much as the fact that the assumptions that motivated the sanction, according to Brussels, remain standing. Alphabet, in fact, continues to bring together the activities of YouTube, Maps and Android, a formidable trio that ensures the search engine, together with Facebook, the almost monopoly of advertising in the digital world.
As for the other balance sheet numbers, earnings per share fell to $5,01 from $7, still above analysts' forecasts of $4,46 per share. Once again, sales generated by advertising on Google were the driving force, rising by 18,4% to 22,67 billion.
Some measures carefully monitored by the market have not gone as expected: the total cost of acquiring traffic has risen more than expected. The cost per click also fell 23%, more than the 14,6% decline expected by analysts. Paid clicks (those for which an advertiser pays each time an internet user clicks on an advertisement) nevertheless increased by 52% in the second quarter of 2017 compared to that of 2016, better than the +35,2% expected by the market.
