Google parent Alphabet last night posted fourth-quarter profit below analysts’ estimates, hurt by a higher tax rate. But analysts still cheered the company’s progress in diversifying its business beyond advertising.
Advertising still accounts for most of Google’s revenue, rising 17.4% to $22.4 billion in the quarter.
But Alphabet’s chief financial officer Ruth Porat underscored that the company is broadening its business – pointing to growth in hardware, app sales and the cloud business.
The company’s other revenue, which captures such businesses, climbed 62% to $3.4 billion.
“We see tremendous potential ahead for these businesses, as well as in the continued development of non-advertising revenue streams for YouTube,” Porat said.
Executives suggested that the company is beginning to reap the rewards of their investment in hardware.