Dive Brief:

• Alphabet, the parent company of Google, released a strong Q2 earnings report that pleased Wall Street, with its stock price rising around 5%.
• Alphabet announced year-over-year growth of 21%, with quarterly revenues of $21.5 billion exceeding analysts’ expectations of $20.76 billion.
• As part of the report, Google said its ad business is growing: The company reported that while cost-per-click is down 7% over the last year, the number of paid clicks has grown 29%. 

Dive Insight:

While Google grew an impressive 21%, Facebook recently announced earnings results that show 59% growth over the last year. The key difference between the companies lies in the disparity in size and maturity. Alphabet’s more modest growth could be considered more impressive given the sheer size of the company and its longtime presence in the marketplace.

TechCrunch points out that Alphabet’s growth is, well, growing, with last year’s Q2 report only boasting 11% year-over-year growth. The increase in revenue comes as Google’s advertising value is declining while advertising volume is on the rise. In the earnings call, CFO Ruth Porat explained that mobile was the primary driver of the increase in ad revenue.

Google's advertising model currently faces a trade-off. Cost-per-click on ads served is trending downward, but because mobile devices have opened up so many new advertising opportunities, the decline in cost-per-click is more than offset by a dramatically higher volume of ads served. Earlier this year, Google announced that it is now serving more search results on mobile devices than desktops, highlighting the importance of mobile for the company and internet consumers.