Earlier this month, Alphabet, Google’s recently formed holding company, had created significant buzz for its impressive quarterly earnings report, surpassing Apple to become the world’s most valuable company with a market capitalization of around USD 560 billion. The last time Alphabet (then still under the name Google) had a higher valuation than Apple was in the year 2010.
The most interesting aspect to note is that apart from Alphabet’s mainstay businesses that did well for the company, its focus on areas such as mobile, YouTube and programmatic has paid off for the company.
The three areas are also critical for companies in the Middle East and North Africa (MENA) region in the year ahead. A lesson from Alphabet’s experience is for companies to keep their efforts in these areas going strong.
Inside Alphabet’s Q4
The technological innovators posted revenues of USD 21.3 billion, which is up 18 percent year-over-year and advertising revenue climbed 17 percent.
A visionary step taken by Alphabet includes segmenting its earnings between Google and Other Bets, which were previously lumped together. This strategy allows Alphabets to have a more precise comprehension about its various ventures.
On one hand Google business, which includes search, ads, maps, apps, cloud, Play, YouTube, Android, virtual reality among others, posted USD 23.4 billion in operating income for 2015; whereas Other Bets, which includes projects like Google X, Calico, Verily (previously known as Google Life Sciences), and self-driving car development posted USD 3.6 billion operating loss. This did not come as a shock, since given the present developmental stage, Alphabet team was not expecting these companies to be profitable yet. However, the majority of the revenue pulled in by Other Bets came from Nest, Google Fiber and Verily.
“Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,” Ruth Porat, CFO, Alphabet said in a statement.
Gmail also stood out during the quarterly conference call. Following in the footsteps of Search, Android, Maps, Chrome, YouTube, and Google Play, now the cloud-based email service has crossed one billion users as of last quarter of 2015.
Alphabet added more than 8,000 employees in the past year, further increasing its stability. The year thus saw an overall expansive growth for Alphabet.
