Google’s parent company Alphabet reported lower-than-expected earnings on Thursday.
Alphabet posted earnings of $7.50 on revenue of $20.26 billion. Analysts were expecting earnings of $7.96 on revenue of $20.38 billion.
Over the last year, revenue from "Other Bets," grew from $80 million to $166 million this year. Its losses also grew, from $633 million to $802 million this year. But, its revenue from "Other Bets" is growing faster than its losses, The Verge reported.
Earlier this year, Alphabet was briefly the most valuable company in the world, but Apple recently regained that title and is now worth about $60 billion more than Alphabet.
Google CEO Sundar Pichai, in the earnings call, emphasized machine learning and artificial intelligence as one of the prime areas for growth in the future. He pointed to that technology as key for boosting the company performance in advertising and cloud services, The Verge reported. He also looked toward the trend of "AI first," which he says the company is at the forefront of.
While Google’s traditional advertising revenue slipped 9% in the first quarter over the year before, that core business is still a pillar of strength for the company. Revenue from advertising also gives the company ample room to develop new technologies. The weakness this quarter appears primarily around the company’s "Other Bets" category, which was established to pursue new and emerging businesses like Google Fiber, robotics, Internet-beaming balloons and health-care research.
Though "Other Bets" is currently operating at a loss, analysts think that some of the company's endeavors may eventually pay off. In February, Alphabet said their "Other Bets" category had an operating loss of $3.57 billion for the year.