Alphabet now the World’s most valuable company, passing Apple

Alphabet now the Worlds Most Valuable Company, Passing Apple

Google’s parent company, Alphabet, passed Apple to be the world’s most valuable company on Monday, with the company now valued at $568 billion.  

The information came to light with the release of Alphabets fourth-quarter earnings report. The company exceeded expectations with $21.3 billion in revenue and $8.67 earnings per share. Analysts were expecting $20.8 billion in revenue and just $8.09 earnings per share. This sent the stock rising over 9 percent in after-hours trading, valuing the company at $568 billion, compared with Apple’s $535 billion.

You can see from the chart below how a combination of Apple’s falling share price and Google’s recent rise has contributed to the change:


Ruth Porat, CFO of Alphabet commented:

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

Q4 2015 Google Revenues

Looking at the results, with particular attention to Google \ Search matters, there is some very interesting information:

Google search q4 results

Over the last year, Google advertising revenues have performed particularly well, rising from $16,309 million for the year ending 2014, to $19,078 million for the year ending 2015. This is a rise of 17 percent.

Many web publishers will be interested to know that for Adsense related revenue, the number of clicks was up 31 percent in total, with paid clicks on Google websites up 40 percent, almost double the increase over the previous quarter (year on year). That being said, and many publishers may recognize this, the aggregate cost-per-click was down 13 percent, with the cost-per-click on Google websites down 16 percent. This fall is perhaps, in part, due to the increasing use of mobile devices.

This fall in cost per click is perhaps, in part, due to the increasing use of mobile devices.    Where the browsing activity has moved to mobile, the value of the advertisement falls.

The full figures are set out in the table below:

google q4 paid clicks

Other Bets business

This earnings statement was the first time that Alphabet has separated its Google business, which includes Search, Gmail, and YouTube, from its “Other Bets” business. The Other Bets business includes its experimental ventures such as self-driving cars, underwater data center testing, and 5G Internet delivered via Solar Powered drones.

While the main parts of the company had revenues of $74,541 million and operating income of $23,425, the Other Bets part of the company had revenue of just $448 million, with an operating loss of $3,567 million.

Google v Apple

It remains to be seen who will ultimately win out over the coming months as the World’s most valuable company. For instance, if you take the volatility in the exchange rates, Google’s revenue would have increased an additional 6 percent. This represents about $1 billion in revenue. Take the same volatility and apply it to Apple, then it represents around $5 billion in revenue.

Equally, with the World Economy a little unsteady at the moment, it would seem a primarily software based business (Alphabet) could have better fortunes than a Hardware business (Apple).

We will be happy to see your thoughts

Leave a reply