Google parent Alphabet Inc. posted surging profits as the advertisers kept flocking to the search giant amidst a worldwide debate regarding internet privacy, which acts as a threat to its key revenue generator.
Earning of Alphabet also received a multimillion-dollar boost from the company’s stakes in startups involving Uber Technologies Inc., however, were tempered by the costliest spending spree in its long history as a public company.
In the first quarter, the net profit hiked 73% to 9.4 billion dollars, up from 5.4 billion dollars in the same period last year. It’s a performance, which highlights the firm’s massive lead in the world market for online ads. The advertising revenue soared 24% to 26.6 billion dollars. Revenue from the “Other Bets,” a segment that includes Waymo self-driving cars, totaled up to 150 million dollars, a hike of 14% from the same period last year.
The results landed at the time when the regulators in Washington are considering getting tougher on internet privacy. While most of the attention on the issue has focused on Facebook Inc. many of the observers believe that Google’s dominant role online implies the firm would also be subject to tougher scrutiny. The European Union, with a sweeping set of rules known as the General Data Protection Regulation, is even moving forward. This would go into effect on 25th May. The new law could affect the revenue of Alphabet that already has announced some amendments to the way it collects consent from the visitors of sites displaying its ads. The companies found violating the sweeping regulation would face fines of up to 4% of their annual global revenue.
CEO Sundar Pichai, when asked regarding the impact of the European regulations on Monday, said that Google has spent more than a year preparing to be compliant and as Google derives most of its revenue from search ads that rely less on personal targeting, much of its business would not get affected by the changes.