Alphabet Takes Top Spot as Worlds Most Valuable Company

Google HQ
Alphabet, the parent company of Google, has passed Apple as the worlds most valuable company, its Q4 2015 financial results have revealed. The company made a profit of $4.9bn (£3.4bn) during the fourth quarter, up from $4.7bn this time last year.

The new figures place the companys valuation at around $568bn, compared to Apples $535bn, with the announcement sending the share price up by around nine per cent in after hours trading, having beaten analyst expectations.

Alphabets total revenue for the fourth quarter was $21.3bn, up 18 per cent year-on-year. $14.9bn of that came from the companys own websites, having grown 20 per cent compared to Q4 2014, while $4.1bn came from Google Network members websites, which showed growth of only 7 per cent compared to last years results.

Annual revenues from the Google business, which includes search and display ad revenues, as well as YouTube, totalled $74.5bn, up from $65.7bn the previous year. Revenues from Other Bets, which covers more experimental projects like self-driving cars and internet balloons, made $448m, an increase of 37 per cent on its previous year, but the unit operated at a loss of $3.6bn.

Looking at Googles ad business in detail, cost per click was down 13 per cent, year-on-year, driven by the growth in YouTubes TruView ads, according to the company, which it cant charge as much for. Paid clicks, however, were up 31 per cent compared to last year, ahead of expectations.

sundar-pichai-at-google-io.png“Our Q4 results show the great momentum and opportunity we have in mobile search and across Googles range of businesses,” said Sundar Pichai, CEO of Google in the companys earnings call. “Whats most exciting is the incredible enthusiasm for our products among consumers and our partners.

“Google helps advertisers reach the right customer at precisely the right micro-moment when they are looking to buy something, go somewhere, know something or do something. Mobile is really helping us making these connections for marketers. Mobile Search was particularly strong in the fourth quarter. Shoppers turned to their mobile devices to purchase gifts online in spare moments throughout the day all season long, and marketers turned to our mobile ad offerings to reach those consumers.”

Pichai also revealed that Gmail had passed the milestone of acquiring 1bn monthly active users, making it the seventh Google consumer product to do so (the others being Search, Android, Maps, Chrome, YouTube and Google Play). All seven services continue to grow rapidly on mobile, with Pichai hinting that it is growth on mobile that has seen Gmail finally join the Billion User Club.

“In the fight for advertisers wallets, Google needs to fend off the mounting challenge from social platforms, with mobile a key battleground,” said Stephanie Carr, vice president for EMEA at Marin Software. “The signs so far are that its managing to hold its own against the likes of Facebook and Twitter – the latest results are positive, with the growth in ad revenue stemming from mobile.

“As todays results prove, advertisers are not fatigued with Google and its segmented model was a good move. But to stay attractive to marketers, the company must continue to help react to changes in consumer behaviour.”