Google's ad business continues to prop up its experimental ventures
"Other bets" lost a lot of cash this quarter, but it's still a drop in the bucket for Alphabet as a whole.
Google's parent company Alphabet just released its financial results for the first quarter of 2016, and unsurprisingly the company continues to rake in huge amounts of cash. Revenue in Q1 of 2016 was $20.3 billion, up 17 percent year-over-year. Net income of $4.2 billion was also up a healthy 20 percent over Q1 of 2015, though unsurprisingly Alphabet's "other bets" companies continue to lose quite a bit of cash -- $802 million in the quarter, if we're being exact.
That's a lot more than those parts of Alphabet lost a year ago, when other bets posted an operating loss of $633 million. But the good news for other bets is that they're at least bringing in more cash than they did a year ago -- revenues of $166 million in the quarter was more than double the $80 million in revenue Google reported a year ago.
This is the first time Alphabet has reported quarterly numbers for its other bets companies. Last quarter, the company revealed just how much money the companies lost throughout 2015 as a whole ($3.6 billion, if you're keeping track). As a refresher, companies under the other bets umbrella include Verily, Google Fiber, Google X, the company's self-driving cars team, the Ventures investment group, Nest, Calico and a number of others.
As usual, Google's advertising business accounts for the vast majority of Alphabet's revenue: this quarter, advertising revenues of $18 billion were up 16 percent compared to a year ago. However, Google's "other revenues" segment (which covers things like hardware sales and Google Play) also grew well this quarter. Revenue of nearly $2.1 billion was a 24 percent increase over Q1 in 2015. Hopefully Google CEO Sundar Pichai will break down where that growth is coming from, but it's possible the powerful duo of the Nexus 5X and 6P are proving to be more successful with consumers than the Nexus 6 that preceded them.
As is usually the case, Google's financial report is a pretty dry affair, and today's investor call didn't offer a lot of noteworthy details, either. Pichai did take an opportunity to call out the launch of 360-degree live video on YouTube and also said the platform reaches more people aged 18-35 and 18-49 than any TV network, cable or broadcast. And as for Google Play, he said that game developers in particular found a lot of traction in 2015 -- 50 percent more games hit the 1 million installations mark in 2015 compared to the year before.
