https://www.cnbc.com/2018/02/02/alphabet-earnings-reaction-shrinking-margin-but-growth-opportunities.html

Wall Street winced when Alphabet missed earnings expectations in the fourth quarter, but analysts remain hopeful about non-advertising opportunities like cloud, hardware, and self-driving cars.

Alphabet's Q4 earnings report revealed that it is still very much an advertising company.. However, a continuing drop in ad rates and an increase in traffic acquisition costs (TAC) -- which is how much Google pays to hardware makers like Apple to use its search product -- are shrinking margins.