Alphabet exceeds expectations as the 'dominant force in digital advertising'

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Starbucks: Shares are down 4.7% after the company fell short of Wall Street's expectations for revenue.

Google's "other revenues" comprising hardware and cloud services, rose nearly 50 percent to $3,095 million in the quarter ended March 2017 (Q1) from $2,072 million in the corresponding period a year ago (2016), according to statements put up on Alphabet's website.

IBD'S TAKE: Alphabet stock is up 16% in 2017 with Friday's gain but has lagged its FANG (Facebook, Amazon.com, Netflix) peers for more than a year.

Other Bets, the unit of Alphabet that includes Google Fiber and longer-term projects, saw revenues rise and losses widen in Q1 2017.

Although it is the parent company to a number of Google enterprises, the actual Google business for Alphabet remains its largest and greatest revenue generator.

After struggling for years to wring profit from the mobile boom, Google is benefiting from a surge in clicks on ads on smartphones.

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"It underscores a macro theme we are seeing in the internet space, which is that the bigger players are getting bigger and the smaller players are treading water or shrinking", said analyst James Wang of ARK Investment Management.

The company's approach to the market is to be one Google, Pichai said. Alphabet has changed its methodology for paid clicks and cost per click, resulting in a "modest increase in paid clicks and a modest decrease in cost-per-click". It started investing in hardware, machine learning and cloud computing. That far exceeded Google Network Members' properties revenue of $4.0 billion, which rose 8.6 percent over past year.

Google has boosted its revenues under the leadership of Pichai from its core advertising business and also from You Tube.

The figure says a lot about how much smartphone activity continues to grow Google's addressable market, and how effective it has become at monetizing this activity. Revenue, however, continued to climb up to $244 million this quarter compared to $165 million in the same quarter a year earlier.

The company delivered $24.75 billion in revenue.

There were virtually no negatives to be gleaned from Alphabet's latest financials. "Many of the Alphabet companies are already using this technology and are planning to use it even more".

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