Google parent company becomes most valuable in world

The hike helped Google parent Alphabet to become the most valuable company in the world at $570bn, trumping Apple’s market value of $538bn.

Alphabet posted a fourth-quarter profit of 4.9 billion USA dollars (£3.4 billion) on Monday, up from 4.7 billion United States dollars (£3.3 billion) a year ago. Google is its bread and butter, but there’s also Alphabet’s fiber Internet business, its Nest division, and several others to carry the torch.

The rise puts Alphabet’s value at $549bn (£382bn) compared to Apple’s market capitalisation of about $534bn (£371bn).

Google’s finance chief Ruth Porat hailed the “vibrancy of the business” during the announcement, with video-sharing site YouTube, as well as the widely used Google search engine, named as the core of the company’s growth.

Google’s advertising revenue increased almost 17 percent to $19.08 billion, while the number of ads, or paid clicks, rose 31 percent, the company said.

The company had $8.67 in earnings per share (EPS) on $21.33 billion in revenue compared to the consensus estimates from Thomson Reuters that called for $8.10 in EPS on $20.77 billion in revenue. That move signaled a more shareholder-friendly approach to managing the company’s cash hoard, according to an AP report. Alphabet’s stock has surged by 45 percent since the end of 2014 when it was still trading under Google’s name.

Over all, while revenue was up 37 per cent for this segment, standing at $448 million, it ultimately operated at a loss of £3.1 billion.

For the full year Alphabet subsidiary Google headed by Sundar Pichai delivered revenues of $74.5bn, up from $65.6bn a year earlier. Google promises to maintain its dominance from desktop to mobile in its advertising and search positions.

Apple had been the most valuable company for four straight years after first surpassing oil giant ExxonMobil in 2011.

This earnings release also marked the first in which Alphabet has separated the results of its Google business – which includes YouTube – from its “Other Bets”, which in turn include more exotic and risky forays such as self-driving cars.