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Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

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Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#31

Post by ChuckMcM »

aresant wrote: post #7

Editorializing: Paid clicks on Google properties +43% - "yaaay we're driving more paid search!" Cost-per-click on Google properties -16% - "ouch our advertisers are seeing less value on these add'l clicks!" To me the second part of this is going to be most interesting to watch - if the clicks they are onboarding are lower quality, this is going to be a net negative.

I tend to agree with this analysis. Not only is the cost per click going down, but the amount of money they are paying out to get traffic is now at a staggering $7B a year run rate. Paying for more traffic and getting less in revenue per click shows up as a higher 'cost per revenue $' value which has gone up from 38% to 41%.

I have felt like the easy pickings have been behind them for a while but given enough money you can buy a lot of traffic. Not great traffic mind you but a lot of it.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#32

Post by WalterBright »

afthonos wrote: post #25
fnovd wrote: post #4

Earlier quoted context omitted.

>Alphabet didn't miss anything; the analysts mispredicted performance. Taken to the extreme, no company ever underperforms and every unrealized expectation is the fault of the analysts.

Orthogonal to my peeve. :-) After earnings, there are two questions: 1. How did X do? 2. How did analysts think X would do? Perfect analysts would predict Xs earnings every time, and the stock would be unaffected by announcements. But analysts aren't perfect. That's ok! What's not ok is that the headlines are invariably "X misses expectations". No, the expectations were wrong . I'm not saying a company can't do well…

If you're used to reading the financial news, the headline is fine, since you know what they're talking about.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#34

Post by magicalist »

theelfismike wrote: post #5

Interesting the effective tax rate went from 5% last year to 22% this year. What would cause that?

Someone else will have to explain what on earth it means, but last year's press release said

> For Q4 2015, our effective tax rate reflects impact of certain one-time items in the U.S., specifically the resolution of a multi-year audit with an ETR impact of 9%, as well as the full year impact of the R&D tax credit with an ETR impact of 8%.

https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#35

Post by neximo64 »

kbutler wrote: post #27
neximo64 wrote: post #24

Earlier quoted context omitted.

You don't pay taxes on the mean. They are unusual because they were minimized.

"Reversion to the mean" is the process where later data is more typical than an outlying datum, so aberrations caused by outliers are averaged out, giving a result progressively closer to the mean of the data as subsequent data is added.

In short, that the rate over a decade instead of over a year is the official corporate tax rate. For Google it doesn't work out this way, still.

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#36

Post by daave »

samfisher83 wrote: post #26
aresant wrote: post #7

Editorializing: Paid clicks on Google properties +43% - "yaaay we're driving more paid search!" Cost-per-click on Google properties -16% - "ouch our advertisers are seeing less value on these add'l clicks!" To me the second part of this is going to be most interesting to watch - if the clicks they are onboarding are lower quality, this is going to be a net negative.

I can understand the usefulness of search ads and ads on maps, but if I see an ad on youtube it is unlikely I am going to go buy a product.

..and yet, TV advertising is still a huge business

YouTube can target ads much better than TV, and with TrueView ads the advertiser only pays if the viewer doesn't skip, so more of the revenue is going to be coming from ads that mutually add value (at least that's the theory)

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#37

Post by bitmapbrother »

tma-1 wrote: post #19
MarkMc wrote: post #17

Revenue is up 22% but EPS is up only 7%. I would normally expect Google's EPS growth to be higher than revenue growth. Where are they spending all that extra income?

On electricity to train all those deep neural networks.

Their DeepMind AI has actually decreased their energy consumption at their data centers.

http://www.techrepublic.com/article/google-uses-deepmind-ai-...

Re: Alphabet Announces Fourth Quarter and Fiscal Year 2016 Results

#39

Post by nyrulez »

aresant wrote: post #7

Editorializing: Paid clicks on Google properties +43% - "yaaay we're driving more paid search!" Cost-per-click on Google properties -16% - "ouch our advertisers are seeing less value on these add'l clicks!" To me the second part of this is going to be most interesting to watch - if the clicks they are onboarding are lower quality, this is going to be a net negative.

It doesn't work like that. Lower CPC does not mean lower value. It just means Google pushing into new eco-systems where CPCs are different from desktop search (e.g. mobile, YT, new publishers/partners) and it may take some time to reach equilibrium among the various actors depending on the ROI of the medium for the respective actors.
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