Alphabet Gets the Upper Hand on Apple

The rise in valuation was significant because this is the first time Alphabet split up all the things we associate with Google – such as its search engine and digital ads – from its “moonshot” projects, including self-driving cars and laying internet cables.

Google reorganised itself under Alphabet last October, and this set of results is the first time the group split itself out into its two major divisions.

Alphabet – Google’s parent – has powered past Apple after its latest earnings report. Revenue for the fourth quarter was 21.3 billion, increased 18% over past year and 24% in fixed FX terms, since the continued strength of the dollar has negative impact on the company’s revenue.

The news beat analyst expectations and sent the company’s shares skyrocketing.

The “other bets” segment, which includes Access, Calico, Nest, Verily, Google Ventures, Google Capital and X, wasn’t profitable in the fourth quarter, though it generated a quarterly revenue of $151 million, up 29.8 percent from $106 million in the year-ago quarter. “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”.

Google Chief Executive Sundar Pichai said on the call that its Gmail service crossed 1 billion monthly active users last quarter, joining Search, Android, Maps, Chrome, YouTube and Google Play in topping that mark.

Google’s shares rose nearly 5 per cent in after-hours trading.

This was an 18pc increase year-on year for Alphabet. All important paid-for clicks – where advertisers pay per person who clicks on the ad – were up 31 percent across the entire internet, and 40 percent on Google-owned sites.

“At Monday’s after-hours levels (which technically reflect an indication, but not the real-world value), Alphabet’s market cap would roughly be $570 billion, eclipsing Apple’s current market cap of about $535 billion”, CNBC reports.

Alphabet’s earnings per share grew 28.3% from Q4 2014 to $8.67.

Alphabet achieved the distinction after reporting a profit of US$4.9bn in the quarter, up from US$4.7bn a year earlier.