GAAP net income was $7 billion, or $10.12 per share, compared to $9.1 billion, or $13.06 per share, last year. Analysts had predicted EPS of $12.38.
During the quarter, revenues from the Google segment increased 20% year-over-year to $40.3 billion. Advertising revenues grew 17% to $33.9 billion. Other revenues, which include revenues from cloud and Play Store, jumped 39% to $6.4 billion. Revenues from the Other Bets division, which includes Waymo and Verily, grew 6% to $155 million.
Total traffic acquisition costs (TAC) to network members and distribution partners totaled $7.4 billion in the quarter. Total TAC, as a percentage of advertising revenues, was 22%. Paid clicks on Google properties rose 18% year-over-year while cost-per-click fell 2%.
The parent of Google reportedly made a bid to acquire smartwatch-maker Fitbit (NYSE: FIT) for an undisclosed amount, sending Fitbit’s shares soaring in today’s session. If this deal is successful, Alphabet would compete against Apple (NYSE: AAPL) in the wearables market, where the latter is already a leader. Neither Alphabet nor Fitbit have confirmed this report.
At the start of this year, Alphabet’s subsidiary Google had acquired smartwatch technology from Fossil Group (NASDAQ: FOSL) for $40 million.