The online company said its revenue from search ads rose 31 per cent in the fourth quarter compared to the same period a year earlier. The company reported $8.67 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $8.10 by $0.57, MarketBeat reports. The thought that, what was formerly known as Google and now a conglomerate called Alphabet is poised to become the most valuable company kept investors spirit high. However, the company’s quarterly earnings report also revealed that it lost $3.6 billion in moonshot projects and “other bets”, which are products beyond the Google subsidiary.
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There are no words to describe how Apple might be feeling right now when it was surpassed by Google’s parent company, Alphabet, as the world’s most valuable company. Alphabet’s earnings prompted an after-hours spurt in its share price on Monday that led to Google’s parent dethroning Apple at the top of the U.S. corporate tree.
Alphabet’s operating margin was 32 per cent, up slightly from 31 per cent in the previous year. The Google segment accounted for $21.18 billion of the total, with turnover from what the company terms “Other Bets” – which includes initiatives like the firm’s Project Loon – coming in at $151 million.
The total traffic acquisition costs (TAC) as a percentage of Google’s advertising revenues were 21% during the quarter.
Porat said the strong revenue growth was a return on years of investment in mobile search, YouTube and so-called programmatic advertising, which involves ads being sold automatically using software. You can expect that results for the combined Other Bets may be uneven in the near term, so it’s likely to be more instructive to look at them on an annual or rolling 12-month basis to assess their trajectory.
$4.9 billion net income in Q4 2015. But if it holds on to that gain once trading begins again Tuesday, it would be worth close to $560bn – the company first broke the half-trillion marker in October.
On a conference call, Chief Financial Officer Ruth Porat said Alphabet may borrow more money, despite having $73 billion in cash on its balance sheet.
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Gmail, the company’s email service, passed one billion users in the fourth quarter, joining six other services with more than a billion users: Search, Android, Maps, Chrome, YouTube and the Google Play app store, he noted.
