YouTube ad boycott didn't slow down Google

SAN FRANCISCO — Google parent Alphabet shrugged off concerns that an advertiser backlash would undercut YouTube sales, surpassing Wall Street estimates on the top and bottom line Thursday.

Shares rose nearly 4% after hours. Google parent Alphabet reported first-quarter earnings after the market closed Thursday.

Here's what you need to know:

-Alphabet reported a sharp increase in revenue — 22% — to $24.75 billion. Analysts had expected Alphabet to report revenue of $24.22 billion.

-Alphabet reported per-share earnings excluding certain items of $7.73. Analysts had expected $7.38, down from $7.50 a year ago. Net income was $5.4 billion, up from $4.2 billion.

-Analysts had feared a standoff with major brands would put a dent in sales. The brands pulled spending on YouTube and other non-search ads after news reports that Google's automated system had placed their ads alongside objectionable content including videos promoting terrorism.

The Silicon Valley tech giant has wooed back advertisers with better safeguards among other measures, according to Google CEO Sundar Pichai. It has also deployed machine learning technology to keep ads from being automatically placed next to extremist or other unsavory content.

"We have taken it very seriously," Pichai said during a conference call with analysts, noting that Google had placed thousands of calls to advertisers following the uproar. "As machine learning gets better, Google will be able to do this even better."

-The adoption of smartphones around the globe continues to benefit Google. Paid clicks on Google’s ads increased 44% in the first quarter  from a year ago. Some of that growth is undercut by the average price for each click, which dropped 19% in the quarter. Google isn't able to charge as much for ads on small screens or on its YouTube video site.

-Alphabet's chief financial officer Ruth Porat gave credit for the standout quarter to "ongoing investments in product innovation" and "great momentum in our new businesses across Alphabet."

Alphabet is the umbrella organization for Google and its myriad other businesses, some of which have experienced significant setbacks over the past year.

In a founder's letter Thursday Alphabet CEO Larry Page glossed over those setbacks. "I certainly feel Alphabet is working well, and as intended," he wrote. "The new structure has helped entrepreneurs build and run companies with the autonomy and speed they need."

-Alphabet’s "Other Bets" revenue rose to $244 million from $165 million and its operating loss grew to $855 million from $774 million. Most of that revenue came from Nest, Google Fiber and life sciences start-up Verily.