GOOGLE PARENT COMPANY Alphabet saw its second quarter profits sink almost 30 per cent in the second quarter as a result of the record £2.1bn EC fine imposed on the company.
This fine, imposed last month, followed a seven-year investigation into the Google's Shopping service, with the EC concluding that the firm "abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service." The EC said that this comes to the "detriment of customers" and "stifles innovation" in the online shopping market.
This fine is the biggest antitrust fine handed out by the EC to date, trumping the €1.06bn fine handed to Intel back in 2009, and taking a bite out of Alphabet's profits.
Still, while the firm's Q2 profits of $3.5bn (around £2.7bn) mark a 28 per cent year-on-year decline, Alphabet still surpassed analyst expectations. What's more, revenues for the quarter came in at $26bn (£19bn), up 21 per cent compared to last year.
"With revenues of $26bn, up 21 per cent versus the second quarter of 2016 and 23 per cent on a constant currency basis, we're delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams," said Ruth Porat, CFO of Alphabet.
Naturally, most of Alphabet's money came from advertising. The firm said that revenues from advertisers on its own sites, such as YouTube and Gmail, and other sites together increased 18 per cent year-on-year to $22.7bn (£17.4bn).
However, Google has warned that its search business could face hurdles going forward, as the firm's acquisition costs are likely to increase in the short term because of the shift to mobile-first advertising and the growing use of programmatic advertising. The amount of money Google makes per click on ads was down by about 23 percent from this time last year.
Alphabet's other revenues, which include money from things such as app purchases, cloud services and its Pixel smartphone line-up, jumped more than 40 per cent to $3.1bn (£2.3bn).
Revenues from the firm's 'other bets', the term the company uses to describe its collection of moonshot projects such as Nest and Verily, rose more than 34 per cent to $248m (£190m) in the second quarter.
Alphabet also announced during its earning call on Monday that it employed 75,606 people at the end of Q2 2017, up from 66,575 a year ago. µ
A surprisingly busy week in a quiet month
Measures just 15.75mm at its thickest point
Firm expects GPU sales to start drying up