Google parent Alphabet posts mixed 4Q results; profit soars

Net revenue, after subtracting advertising costs, was $37.6 billion, up 18% from $31.8 billion a year earlier. But analysts were looking for $38.4 billion.

While Google is still the clear leader in the digital advertising market, it is seeing growing competition from the likes of Facebook and Amazon.

Google — and with it, Alphabet — makes the majority of its money from selling targeted advertising across the web, apps and Google products including its search engine and video streaming site YouTube. Investors are now also closely watching the growth of Google's cloud business and its aspirations in the health care industry. Google agreed to buy the fitness tracker company Fitbit in November.

Alphabet disclosed revenue for YouTube and its cloud business for the first time, something analysts have been seeking for years. It said YouTube's advertising revenue was $4.72 billion, up 31% from $3.61 billion a year earlier. Google Cloud revenue grew 53% to $2.61 billion from $1.71 billion a year earlier.

This was Alphabet's first earnings report with Sundar Pichai at the company's helm, following the depature  of co-founders Larry Page and Sergey Brin, the co-founders of Google, in December. Pichai was head of Google before.

Shares of Alphabet fell $62.60 to $1,420 in after-hours trading. The stock had closed up 3.5% at $1,482.60.