Google’s Parent Company Spends Like It’s Thinking of a Future Beyond Ads

Alphabet’s expenses rose 27 percent in the quarter. Ms. Porat said the heaviest spending came from research and development costs — mainly the hiring of additional technical staff. The company said its total employees had increased to 85,050 from 73,992 in the same period a year ago.

Over all, Alphabet said its net income rose 73 percent, to $9.4 billion, from the same period a year earlier, boosted in part by an increase in the value of its outside investments. Revenue rose 26 percent to $31.1 billion.

Ms. Porat also pointed out an increase in spending for advertising to promote newer products including like Google’s own hardware — a relatively new business manufacturing branded smartphones, laptops and smart speakers — and the company’s artificially intelligent digital assistant.

“They are thinking about their future,” said Collin Colburn, an analyst at Forrester Research who focuses on search advertising. “They want to diversify beyond just advertising being such a big part of their business.”

That focus on variety comes as the data-collection practices that underpin the entire digital advertising industry are under intense scrutiny after the personal information of up to 87 million Facebook users ended up in the hands of the political research firm Cambridge Analytica. Google’s advertising business is more than twice the size of Facebook’s, and the company’s portfolio of data about its users is as expansive — if not more so — than that of the social network.

Still, the search giant’s core business showed no sign of slowing in the first quarter. Revenue from Google’s advertising business, which includes ads shown on Google search and commercials running before YouTube videos, increased 24 percent during the quarter.

However, Google’s advertising profits were weighed down by an increase in traffic acquisition costs — the fees that it pays companies like Apple to make sure that its search engine is the default option when people open a browser on the iPhone.

Also among the company’s expenditures in the quarter: $2.4 billion to buy the Chelsea Market building in Manhattan, where the company had set up some of its New York offices.

On a conference call with investment analysts, Sundar Pichai, Google’s chief executive, avoided answering questions about the potential effects of new regulations concerning data privacy in Europe. The new law, which goes into effect on May 25, will restrict how companies like Google can collect, store and use personal data from users across Europe.

Mr. Pichai said the company has been preparing for the law for more than 18 months, but didn’t discuss how the new regulations may affect the company’s bottom line.

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