WMT Walmart Inc

By Rolfe Winkler 

Google parent Alphabet Inc. on Thursday posted a sharp increase in first-quarter revenue, continuing a trend of sharp growth seemingly unscathed by boycotts from some of its major advertisers.

Alphabet said net revenue rose 22% to $24.75 billion from a year earlier, beating Wall Street estimates of $24.22 billion, according to Thomson Reuters. First-quarter profit rose 29% to $5.43 billion, or $7.73 a share, from $4.21 billion in the same quarter last year. Analysts had expected $7.39 per share.

Alphabet's shares traded 4.4% higher after the close of regular Thursday trading.

Analysts had expected Google's advertising revenue to have taken a hit in the first quarter because major advertisers, including Coca-Cola Co. and Wal-Mart Stores Inc., pulled their spending on all Google advertising except targeted search ads after they were spliced in with offensive content. YouTube responded by giving them more controls over where not to place their ads. Growth in YouTube advertising has propelled Alphabet's earnings in recent quarters.

Google has come to dominate the online advertising market along with Facebook Inc. The digital giants gobbled up an estimated 77% of the gross advertising spend in 2016, up from 72% the year before, said Pivotal Research analyst Brian Wieser analyzing data published by the Interactive Advertising Bureau.

Google and Facebook captured 99% of the online ad industry's revenue growth in 2016, estimated Mr. Wieser. On balance the rest of the industry was flat.

Alphabet is trying to diversify its business beyond online advertising, and its "cloud" business that competes with Amazon Inc.'s web services unit is a key focus. Google executives are so optimistic about the tech giant's cloud business, selling computing power to companies over the internet, they say it can one day eclipse Google's massive advertising business.

Write to Rolfe Winkler at rolfe.winkler@wsj.com

(END) Dow Jones Newswires

April 27, 2017 16:33 ET (20:33 GMT)

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