A recent earnings report has shown that Google’s parent company – Alphabet has passed Apple as the world’s most valuable company causing the company to send its share price skyrocketing to over 9% in after hours trading.
Leaving Apple in its Dust
This shift in power has caused Alphabet to be worth around $568 billion, in comparison to Apple’s now mediocre networth of $535 billion.
This is the very first time that Alphabet has parted out its results of its successful Google business which holds the search engine, Google itself and the more than famous video site YouTube which holds hundreds of overly successful vloggers recording their day to day lives. This is of course separated from it’s more speculated business ideas from experimental ventures such as internet balloon programmes and the much anticipated self-driving cars.
Annually, Alphabet has accumulated around $16.3 billion, but the figures have revealed a loss of $3.6 billion on their more adventurous gambles during the same period allowing some eyebrows to rise at their self-driving cars. Of course, the Google search engine noticed a rise to $23.4 billion as the online advertising possibilities increased.
Neil Doshi, managing director of research at Mizuho Securities reported “It looks like Google continues to execute on mobile [Advertising]. Two or three years ago, mobile was a big head wind for Google. There were concerns that it [had] a negative impact on its desktop business, but as mobile takes over for more searches, mobile ads are becoming closer in value to the desktop ads”.
It would seem that Alphabet is taking advantage of the last week punishment for Apple not being willing to share on their future big ideas, by spending big money on improving their technology, and being rewarded for it.
Although Alphabet was being pressured to reveal their expenditure on their more adventurous ideas such as Google Glass, it would seem that their loss is tiny in comparison to their huge rise in profits with the famous search engine. As long as that keeps rising, Alphabet will be a constant goldmine for future investors.
The biggest gain on the company was the all important advertisement clicks. Each time a potential customer clicks on a single advertisement, money exchanges hands. Each time we accidentally click one of those pesky adverts, we’re paying someone’s paycheck, and coincidentally, paying Alphabet.
The United Kingdom has been such a large amount of profit for Alphabet that they have been forced to separate the figures, which is the only exception outside of the United States. Revenue in the United Kingdom has rose 16% to $1.92 billion in the fourth quarter. However, the money being earned from the UK, is soon to be leaving the internet giant’s pocket, due to tax row, that shows a lenient amount of £130 million to be paid to the country in back taxes stretching back to 2005.
No matter what expenses are being changed hands, it truly does show in the recent reports how far Alphabet has risen, and how far Apple has plummeted. Could Alphabet’s risky investments, and lack of fear of a plummet of profits in that area cause any other company to be void?