Alphabet’s (GOOG) 2017 Q1 Earnings Call

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Alphabet’s exec Ruth Porat spoke on a conference call this week about the company’s Q1:

“Our revenues of $24.8 billion in the first quarter demonstrate our broad-based strength globally, with revenues up 22% year on year. In constant currency, our consolidated revenues grew 24% versus 1Q 2016. Growth in advertising revenues was again driven by mobile search, with ongoing strength in YouTube and programmatic. We also had substantial growth in other revenues from Play, hardware, and Cloud. … We realized a negative currency impact on our revenues year over year of $304 million or $87 million after the benefit of our hedging program.”

Pharmaceutical Ad Spending Up 62% Since 2012

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The U.S. is one of only two countries that allow drug ads on TV (the other is New Zealand), and spending keeps rising. Most other markets have not increased spending since 2012.

$6b was the amount spent last year, mostly on TV, and the ads are shown most heavily during major network’s evening news, Mike & Molly, and General Hospital, according to Kantar Media, a consulting firm that tracks multimedia advertising.

The value of the industry in the U.S. is reported to be $425b nominally; $263b in pharmacy and drug store sales.

While drug ads are legal in American and not in Canada, Canadian authorities have more or less turned a blind eye to illegal ads targeting consumers, at least according to the research of UBS scientists. Plus, it’s always been legal to target health professionals in Canada, and a few years ago “reminder ads” (brand recognition aimed at consumers without any health claims) were made legal.

Snapchat: Where Are We?

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The app may be on every young person’s phone, but it’s losing money.

When it launched its IPO this year, it raised $3.4b.

But as of January, it’s lost $1.2b. Almost half of that loss was in 2016.

It was growing at 15m new daily users in the first 3 quarters of 2016, but the last quarter had just 5m new users.

Snapchat is trying to make money by employing industry experts, and they will be setting their sights on combating competitors who do basically the same thing as Snapchat — Instagram with Stories and WhatsApp with Status. They will also be trying to win away advertising investment from other platforms.

However, investment in video ads is growing steadily, adding about $5 per year since 2014. Growth expected to increase, and be worth $90m in 2020, up from today’s $75m.

Chinese Tech No Longer Just Copycat, Industry Expert Says

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“If you study Chinese products, you can get inspiration,” according to a woman who works for technology investment firm Andreessen Horowitz.

She also works helping U.S. startups learn from Chinese tech.

Connie Chan says Chinese tech is ahead of U.S. tech in everything from livestreaming (worth $5b) to messaging. For example, while Americans almost all use messaging apps daily to communicate, in China they use similar apps (such as WeChat) to pay utilities and traffic tickets, order medications to their door, and get marriage licences.

“I spend so much time teaching people what they can’t see,” she told Wired recently. “It won’t stay invisible for long.”

The idea that Chinese tech is just a copycat of other countries’ is now obsolete, she said.

Google Exec Makes $200m for the Year

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Now that Google is a sub-company inside Alphabet — which is run by founders Sergey Mikhaylovich Brin and Larry Page — Google is run by Sundar Pichai, and his earnings are up almost double from 2015.

In 2016, he made $199.7m. $650k is his base pay, and $198.7m was a stock award.

Google is reportedly more profitable under Pichai. It has boosted sales from its core advertising and YouTube business, and is working on cloud computing, machine learning, and hardware, including smartphones, VR headsets, routers, and smart speakers.

Alphabet is growing. GOOG’s stock rose above a $600b market cap this week for the first time.