Google's search activities grew by 21 percent to USD 21.3 billion, and generated an operating profit of USD 6.99 billion, leading to an increase in the margin to 32.8 percent from 31.7 a year ago. Ad revenue was up 19 percent to USD 19.1 billion, and 'Google other' rose 33 percent to USD 2.17 billion. The latter includes Google Play, hardware such as the Chromecast, service fees from businesses and licensing.
At the ad business, the number of paid clicks rose 29 percent, while the cost per click dropped 7 percent year-on-year. Traffic acquisition costs rose to 25.8 percent of revenue, with USD 2.62 billion for AdSense partners and USD 1.35 billion for others.
Revenue from Alphabet's 'Other bets' increased 150 percent to USD 185 million, while contributing an operating loss of USD 859 million. The other bets include activities such as smart home developer Nest and Google Fiber.
Google's total operating profit rose 24 percent year-on-year to USD 5.97 billion, and net profit increased 24 percent to USD 4.88 billion. Margins improved slightly.
The R&D costs increased 21 percent to USD 3.36 billion, and Google raised investment speding to USD 2.12 billon. Free cash flow was still up to USD 7.00 billion, leaving the company with cash of USD 78.5 billion at the end of the quarter. The number of employees reached 66.575, almost 10,000 more than a year ago.
