Google’s guardian firm Alphabet noticed decrease than anticipated earnings within the final three months of 2017 after greater prices offset an enormous soar in promoting gross sales.
The tech big made quarterly earnings of $6.8bn (£four.8bn), lacking the $7bn analysts had predicted.
Income jumped by 24% to $32.3bn helped by adverts offered on its search engine, web sites and apps.
However total bills climbed as Alphabet spent cash on diversifying past its core search enterprise.
This included funding in YouTube content material, in an try and make the service extra engaging to advertisers.
Alphabet shares fell greater than 5% in after-hours commerce, earlier than paring these losses.
The outcomes for the October-to-December interval excluded a one-time $9.9bn cost referring to modifications to the US tax code, that may decrease company tax charges.
Rising calls for for adverts boosted Google’s core promoting enterprise.
The corporate sells advert area on its search engine, its fast-growing YouTube video streaming service and a community of third-party web sites and apps.
And its algorithms have change into simpler at delivering cellular adverts, serving to Alphabet’s revenues high $100bn for the primary time.
However with extra search now being finished on telephones, Google has been paying extra to make sure its search engine is the default possibility on services together with Apple iPhone and Mozilla’s Firefox browser.
Whereas Google’s core advert enterprise is booming, the agency can also be investing in different new ventures – together with increasing its cloud computing providers, growing self-driving automobiles and strikes into the well being expertise sector.
That contributed to bills rising by 27% within the quarter, in contrast with a yr earlier, it stated.
“We’re targeted on constructing a second wave of progress inside Google over the medium and long-term, Google chief govt Sundar Pichai stated on an investor convention name, noting the cloud computing was producing $1bn in quarterly gross sales.
Alphabet additionally introduced board member and former Stanford College president John Hennessy would exchange Eric Schmidt as chairman.