Google Needs To Convince Wall Street It Does More Than Sell Ads

According to Recode's Mark Bergen, one of the criteria for success would be Alphabet proving that its Google unit is more than just a business that sells advertisement space.

'Other' Segment

Moonshot Money

Granted, investors will keep a close eye on Google's cost-per-click of each ad as a proxy for mobile ad health. However, Bergen suggested investors keep an eye out on two key categories beyond just ads.

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Google still groups together revenue from digital media, enterprise sales and hardware sales under the "other" revenue category. The segment has grown its revenue at around 24 percent annually the past two quarters and read $1.63 billion in the second quarter a year ago.

Meanwhile, Google's "real oomph" in the other category is enterprise, which "has the best shot" of being Google's next $10 billion-plus business.

Thursday's earnings report marks just the third print in which Alphabet splits its reporting segments into the core-Google business category and "other bets."

Only three units outside of Google's core business makes money, including Fiber (broadband), Nest (home device automation) and Verily (medical products).

As noted by Bergen, these businesses remain "very tiny" compared to Google's core business, but, nevertheless, Thursday's print offers a new quarter's worth of information on their future prospects.

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