Alphabet Inc., the owner of Google and YouTube, reported a 21 percent jump in quarterly revenue on Monday, maintaining a growth rate
Alphabet said it made $3.5 billion in net income on sales of $26 billion. The profit would have been much larger but for a record $2.7 billion European Union antitrust fine.
Still, the company noted that costs were rising faster than sales and warned that expenses would remain high as more searches shift to mobile devices.
Alphabet's cost of revenue, a measure of how much money the company must spend to keep its platforms running before added costs such as research, rose 28 percent, well above the growth in revenue itself.
With its latest profits, Alphabet reported $15.7 billion in cash and cash equivalents, and another $79 billion in marketable securities.
This year, Google is expected to have $73.75 billion in net digital ad revenue worldwide while Facebook is expected to take in $36.29 billion, according to research firm eMarketer.
Sundar Pichai, chief executive officer of Google, said that Google would fight to continue bundling its Android operating system with popular smartphone apps such as Google Maps -- a practice the EU antitrust officials are investigating.
Pichai was also appointed to the Alphabet board of directors on Monday.
Most of Google's growth comes from mobile search ads, YouTube marketing spots and automated marketing called programmatic campaigns.
Google's ad revenue rose 18.4 percent to $22.67 billion. Revenue from other Google products, a category that includes the Pixel smartphone, the Play Store and Google's cloud business, rose 42.3 percent to $3.09 billion. Alphabet competes in the cloud business with tech companies Amazon.com and Microsoft.
Losses from other Alphabet units - an array of businesses known as "other bets" that includes the Waymo self-driving car company, thermostat-maker Nest and the life sciences firm Verily - narrowed to $772 million from $855 million a year earlier.