Alphabet Chief Financial Officer Ruth Porat told analysts the company was experimenting with its ad products as users grow reliant on mobile devices and that it was seeing revenue volatility as a result. Sales of Google's Pixel phones also struggled amid intense competition in the premium smartphone market, she said.
The 17 percent rise was the slowest in three years and compared with 26 percent for the same quarter a year earlier. About 84.5 percent of revenue, compared with 85.5 percent a year ago, came from Google’s ad business, which sells links, banners and commercials across its own websites and apps and those of partners.
Alphabet has said its spending increases are justified, with huge outlays going to offices, data centers and artificial intelligence capabilities in line with the expected demand for its services. And Google's costs could jump further if governments globally follow through on growing threats to rein in the ability of apps to track users for advertising purposes. Other regulators have discussed forcing companies to step up monitoring of user content.
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