Alphabet reports strong Q1 on the back of booming advertising business

The compensation committee of Alphabet Inc., Google's parent company, said that the compensation was paid keeping in mind Pichai's elevation and "numerous successful product launches", reported the CNN, citing regulatory filings by Alphabet Inc.

Facebook and Google now dominate the industry growth in digital advertising. Last year, the company delivered earnings of $6.02 per share on total sales of $20.26 billion during the same quarter.

It is clear that advertising is the main money maker, after it posted advertising revenues of $21.41 billion (£16.5bn), or around 87 percent of Alphabet's total revenues.

After Google's first-quarter earnings and revenue beat on Thursday, analyst reports said Google's growing traffic-acquisition costs aren't a big deal as long as its mobile business keeps humming.

Speaking on an analyst call following the results announcement, Alphabet CEO Sundar Pichai said Google had been on a charm offensive.

As a result, these companies began a mass boycott of YouTube, much to the worry and chagrin of its army of creators.

Alphabet's chief financial officer Ruth Porat said during the earnings call that "YouTube revenues continue to grow at a significant rate", dispelling concerns about the possible impact of an advertiser boycott of the video service.

The internet company's revenue rose 22% on the same period a year ago to 24.7 billion dollars (£19.1bn), a figure that was also more than four billion dollars higher than analysts predicted.

Google's "other revenues" which includes cloud, Play and hardware hit $3.1 billion in revenue, up from around $2.1 billion in the same quarter a year earlier.

Paid clicks, where an advertiser pays only if a user clicks on ads, rose 44 percent.

Pichai added that Google works "very hard to create the best environment for brands on YouTube", highlighting its "cornerstone" offering Google Preferred, which allows brands to advertise against the top 5 per cent of content.

Alphabet's net revenues (net of traffic acquisition costs) income for 2016 was $73,479 million and was projected at $86,669 million by Nomura analysts in a note last month.

Google parent company Alphabet Inc (ticker: GOOG, GOOGL) is making big changes to two of its largest, most popular businesses.

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