*By Chloe Aiello* Google parent company Alphabet slipped in extended trading on Monday after the FAANG stock beat Wall Street expectations on its top and bottom lines, even as cost-per-click ー or the amount Google charges advertisers when an ad gets clicked ー tumbled. "The revenue that they get from ads is critical so if you see a decline in that whatsoever, that is going to push stock price a little bit lower," Danielle Shay, director of options at Simpler Trading, told Cheddar. Alphabet ($GOOGL) reported earnings per share of $12.77 on revenue of $39.28 billion far exceeding what analysts were expecting, according to Thomson Reuters. The quarterly revenue was 22 percent higher than the prior year. Google also reported advertising revenue of $32.64 billion, just beating analyst estimates, although cost-per-click declined 29 percent year-over-year on Google properties, and 9 percent from the previous quarter. Paid clicks, however, jumped by 66 percent. "Cost-per-click declining I think is kind of curious. I wouldn't generally expect you drive more clicks but the price of them go down. So I think that's a very, very interesting trend," SteelHouse CEO Mark Douglas told Cheddar. "Those two metrics not being in-sync is not normal and I think something I'd be looking into." Ad revenue is key for Google, as it faces a growing threat from e-commerce giant Amazon, which in September quietly [slid behind Facebook ($FB) and Google](http://fortune.com/2018/09/19/amazon-facebook-google-digital-ads/) as the third largest digital advertising platform. When Amazon [reported earnings last week](https://cheddar.com/videos/amazon-whipsaws-after-reporting-fourth-quarter-earnings), it said sales in its advertising-dominant "other" category came in at $3.39 billion for the quarter and $10.1 billion for the full year ー more than double that of last year. "Google is first in this market. All growth of other players ultimately in some way comes from Google if they were still in the market alone. And they're not anymoreー they're competing with Amazon, they're competing with Facebook ー and so, ultimately, this has to come out of their pocket in some way," Douglas said. Google is still far ahead of Amazon in terms of ad revenue, but its cost of business has been rising. This quarter, its traffic acquisition costs, or the payments it made to direct traffic to its search engine, climbed to $7.44 billion ー up from $6.45 billion year-over-year ー or roughly 23 percent of total revenues. "So much of the report was so positive and they are going to have to work on those \[traffic acquisition\] numbers, but at the end of the day with the diverse lineup of product offerings, I like Google to the upside," Shay said. Google grew its "other revenues," which includes hardware and Google's cloud business, [according to CNBC](https://www.cnbc.com/2019/02/04/alphabet-earnings-q4-2018.html), to $6.49 billion in the fourth quarter ー up more than 30 percent year-over-year. Alphabet's "other bets" category, which includes self-driving unit Waymo, also climbed in the fourth quarter ー up about 17.5 percent to $154 million. For full interview [click here](https://cheddar.com/videos/googles-ad-business-grows-in-latest-quarter).
