In 2015 as a whole, Google earned $74.5 billion in revenue with $23.4 billion of operating income, both up over the year before.
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In contrast, Google has maintained its leadership in the Internet search and ad market while at the same time, building some of its other popular products in video, mobile, web browsing, email and mapping.
The announcement sent its share price up as much as 9% in after-hours trading. That ranking, of course, could shift again in regular trading Tuesday. But recently Apple share have dipped, with a fall of more than 20% over the last three months as investors worry that iPhone sales have slowed, according to Reuters.
This happened when Alphabet reported its fourth quarter financial results after the markets closed on Monday. “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”. That translates into a whopping profit margin of 40 percent. This generated net a profit of $4.9bn, a 25 percent increase over previous year.
Meanwhile, Alphabet’s other companies together produced an operating loss of $1.2 billion on revenue of just $151 million.
In the company’s earnings report, these are lumped together in “Other Bets”, obscuring quite how well each one is doing.
Alphabet lost almost $3.6 billion United States dollars in 2015 on its Other Bets moonshot projects, a number that’s considerably worse than 2014’s $1.9 billion USD in loses on the same projects. Google had become known for its free-spending habits and reluctance to share information with analysts. Ruth Porat, Alphabet’s chief financial officer, put the losses down to the variation and early stages of the projects falling under this banner.
Josh Olson, an analyst at Edward Jones & Co., said, “Alphabet’s core business looks very healthy”. “Our priority remains revenue growth but that doesn’t give us a pass on a rigorous approach to expense management”, she said.
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The total traffic acquisition costs (TAC) as a percentage of Google’s advertising revenues were 21% during the quarter. The torch that comes with being America’s most valuable company has been passed from tech name to tech name once again.
