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Google joins in Amazons spending spree, but to a lesser degree

Alphabet Inc.s big earnings shortfall was not just the result of its equity investment losses: Continued heavy spending on hiring and real estate by the internet search and advertising behemoth also played a role.

Alphabet executives blamed the profit decline on free spending, a longtime habit for Google that has declined since Chief Financial Officer Ruth Porat arrived from Wall Street.

Hiring was a big part of Googles spending, Porat said in Mondays conference call, along with investments in cloud data centers and offices to house all the new employees.

Going forward, however, Porat said she expects that the primary driver of its capital expenditures will continue to be expanding its data centers and increasing the compute requirements to support machine learning, cloud search and YouTube.

Neither company has made a big splash in acquisitions recently, though Alphabet is reportedly eyeing a well-known name: Fitbit Inc.

Reuters on Monday reported that Alphabet was considering purchasing the wearables company to round out its growing hardware offerings, which could lead to a lot more money heading out the door.

But if the tech titans are going to keep spending amid tariff fears and whispers of the end of the current tech boom, investing in the future is a much better target than even more stock repurchases.

Original article