Google parent Alphabet reports lower Q2 profit thanks to EU fine
Also negatively affecting the report was a $2.74 billion fine that was charged to Google by the EU for antitrust violations. The cost to acquire traffic came to $5.09 billion, up from $4.75 billion. For the quarter, operating income was up 15%, but after taking into consideration the fine, Alphabet reported a decline in Q2 profits. Revenue growth was led by YouTube ads and mobile search ads. The streaming video site now has 1.5 billion monthly users.
Also today, Google CEO Sundar Pichai was added to Alphabet's board. The company also announced that it had hired more than 1,000 new employees during the quarter, with most of those added working for Google's cloud business.
Google is planning on updating Google Search as consumers using smartphones continue to flock to the application. The company's success in search was one of the reasons why it was fined by the EU. The latter came to the conclusion that Google was using its monopoly in search to benefit its online shopping service over those of competitors.
Investors dumped Alphabet shares after the report. Closing at the end of regular trading at $980.34 for a gain of $7.42 on the day, after hours the stock (ticker symbol GOOG) plunged $32.03 or 3.27%, to $948.31.