Alphabet Dethrones Apple as World’s Most Valuable Company

Google’s new parent company Alphabet reported a strong set of fourth-quarter and full-year financials on Monday, driven by its core search and advertising business. Revenue for the three months to December 31 was $21.3 billion, up 18 percent from the year before and higher than the $20.8 billion analysts had been expecting, according to a poll by Thomson Reuters.

Overall, Alphabet’s operating income came in at $5.38 billion in Q4, up 22%, while its net income was $4.92 billion, an increase of 5%. That gives the iPhone maker a market value of $530.6 billion.

Alphabet has separated out the results of its Google business – which includes the search engine and YouTube – from its “Other Bets” business, which includes more experimental ventures such as self-driving cars and internet balloon programs.

Google ad revenue climbed globally, gaining on both mobile devices and desktop computers, as per Alphabet Chief Financial Officer Ruth Porat.

For the first time the company’s core business was broken out from its big-swing “moonshot” projects, allowing investors to see inside the tech giant with a little more clarity, and they like it a lot. Advertising revenue at YouTube also grew during the year, by 17 percent. But revenue also increased to $448 million, from $327 million in 2014 and $12 million in 2013. Alphabet, whose shares surged by 9% on Tuesday morning trade, is now valued at $542 billion, which is one-fourth of the GDP of India, the world’s eighth largest economy.

The new structure under Alphabet is expected to offer more transparency for investors anxious about Google investing in money-losing projects. Its capital expenditures were $2.1 billion and free cash flow was $4.3 billion. Alphabet’s combined share classes were worth $549 billion, compared with Apple, which had a value of about $534 billion.

Google, under Alphabet, still controls services such as Search, Maps, Ads, YouTube, Apps, Coud, Android, and Chrome. So far, it doesn’t seem however that Google is making as much of an impact in this area as Amazon and Microsoft, at least, not that they are prepared to admit to.