Alphabet Inc. reported the fourth-quarter results on Monday that beat the board expectations. However, it observed the fall of stocks by 3% due to pressure on advertising that lowered the profit margins.
Cost per click cost that the company charges for advertisement on websites witnessed drop by 29% compared with last year. It witnessed the 9% increase from revenue of last quarter. This can act as an alarm to their investors that the pricing power of the company is lowering.
Google, the product or the company has new pressure especially in the digital advertising and growing presence of Amazon. In addition, the company is witnessing highest pricing pressure that is increasing the business cost.
The tech giant reported the capital expenditure of worth US$7 bn which was expensive than what was projected. The company reported a margin of 21% in the fourth quarter, which is also lower than last year’s suggestion.
The overall margin of the company fell by 2% from last year, which is a sweeping decline for the Alphabet. However, it registered growth by 20% from last year in the fourth quarter and the same growth rate as the last quarter.
The company collected revenue from advertising that witnessed a surge in 20% from the fourth quarter of last year. In addition, it continued growth this year with the same growth rate.
Traffic acquisition costs, Google paid to companies such as Apple is equal to US$7.44 billion, which higher by 13%. Earlier, it paid the amount of US$6.58 billion and higher than 15% in the year-ago quarter.
The company was of 2,000 and now the headcount is 100,000 that is an increase of 80,000 employees.