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Google Q2 Booms as EU Fine Worries Loom

Dan Jones
7/23/2018
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Alphabet, the umbrella company around Google, reported that its revenues were up 26% for its second quarter, but the company is keeping a wary eye on the possible fallout from the recent $5 billion fine levied by European anti-trust regulators.

Alphabet Inc. reported revenue up at $32.7 billion compared to $26 billion in the same period last year. Net income, meanwhile was down, from $3.5 billion in 2017 to $3.2 billion this quarter, as Google has set aside the $5 billion EU fine.

"Android has really worked well for users globally, said Google CEO Sundar Pichai on the call, citing "robust competition" for the mobile operating system, which is used by around 80% of the world's smartphones. Pichai said that the company is still "analyzing" the decision, although Google has already said it will appeal the fine.

Nonethless, despite Alphabet's other ventures and moonshots, the Android mobile operating system is key to the company because it helps to drive its mobile ad revenue, still the key component of its revenue. Advertising revenue was $28 billion for the quarter.

Financial analysts on the call worry that Google might be forced to decouple its mobile Chrome browser -- a crucial conduit for serving ads to Android users -- from other apps that the search giant is alleged to have pushed on smartphone vendors that wanted to use the open source Android OS.

None of this is a concern for investors yet, however, Alphabet shares are trading up $13.12 (1.10%) to $1,211.00 in after-hours trading Monday evening.

— Dan Jones, Mobile Editor, Light Reading

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