Impressive Growth for Alphabet's Advertising Business
While revenue results were better than expected, operating margin was slightly below consensus for the wide-moat firm.
Ali Mogharabi: Alphabet reported better than expected fourth-quarter revenue as the firm continues to grow its advertising business impressively. Similar to Facebook, Alphabet is further monetizing its users and attracting more ad dollars to not only its search but also its YouTube video platform, demonstrating the firm's strong network effect moat source. While Alphabet's operating margin was in line with our internal projection, it was slightly below the consensus. We expect the firm to continue its investments to stay ahead when it comes to innovative tools not just for consumers, but also for advertisers and enterprises, further pressuring margins in 2019.
We look for Alphabet to continue to dominate the online search market, which drives consistent double-digit, top-line growth. While Google is facing more competition from Amazon, we note it is also further investing in making its search and display ad platform more dynamic and easier to use.
Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.