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Alphabet More Valuable Than Apple As Google’s Core Business Beats Expectations

Ben covers web and technology giants such as Google, Amazon, and Microsoft and their impact on the cloud computing industry, whilst also writing about data centre players and their increasing importance in Europe. He also covers future technologies such as drones, aerospace, science, and the effect of technology on the environment.

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But operating loss from Alphabet’s self-driving cars and other moonshots increases to £2.5 billion

Alphabet, the new parent company of Google, has surpassed Apple as the most valuable firm in the United States.

Alphabet, which is also the parent company of Nest and Google Fiber, smashed quarterly profit forecasts on Monday, hitting consolidated revenue of $21.33 billion (£15bn) for the financial quarter ending December 31, an 18 percent increase from the $18.10 billion (£12.5bn) reported a year earlier.

Alphabet’s results show Google is still absolutely core to its success, with an operating profit margin of 31 percent.

The company’s earnings from its ‘other bets’, the name given to the group of projects that includes self-driving cars and the Calico health project, hit $448 million (£311m) in 2015, but at a massive operating loss of $3.6 billion (£2.5bn).

Other bets

google
A Google self-driving car pulled over by police in California

Revenue from ‘other bets’ was $327 million (£158m) in 2014, so there is growth in these sectors, but 2014’s operating loss was under $2 billion (£1.4bn). So while Alphabet may be making more from its so called ‘moonshots’, it’s also spending more.

Ruth Porat, Alphabet’s chief financial officer, said: “Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people.”

Google, under Alphabet, still controls services such as Search, Maps, Ads, YouTube, Apps, Coud, Android, and Chrome.

Google’s advertising business hauled in revenue of $19 billion (£13.2bn) in the fourth quarter, up 17 percent from a year earlier. Paid clicks from ads were up 31 percent, beating analyst expectations of 22.4 percent.

Other revenue from Google, which includes its cloud business, were $2.1 billion (£1.5bn), up 24 percent year-over-year. Google’s websites revenue hit $14.9 billion (£10.4bn), a 20 percent increase year over year, with Google’s networks revenue reaching $4.14 billion (£2.9bn), a 7 percent year-over-year jump.

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