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TECHNOLOGY A23
Tuesday 2 February 2016
Google parent tops Apple as world’s most valuable company
MICHAEL LIEDTKE In this Nov. 12, 2015, file photo, a man walks past a building on the Google campus in Mountain ways been a little muddy,”
AP Technology Writer View, Calif. Alphabet Inc., Google’s holding company, reports financial results Monday, Feb. 1, said Edward Jones analyst
SAN FRANCISCO (AP) — 2016. Josh Olson. “The hope now
Alphabet, Google’s new is that management will
parent company, topped Associated Press continue to show greater
Apple as the world’s most cost discipline.”
valuable business in after- drivers to curing cancer. loss of $1.2 billion on rev- Under the previous setup Google is also counting
hours trading Monday af- Until now, the expenses of enue of just $151 million. at Google, “things had al- on advertisers to gradu-
ter reporting surging earn- running those peripheral Alphabet labels that cate- ally pay more for market-
ings. operations had been hid- gory “other bets.” That loss ing messages on smart-
Alphabet Inc. earned $4.9 den in Google’s financial also excluded employee phones. They still aren’t
billion in net income on statement. The company’s stock expenses. paying as much for mobile
revenue of $21.3 billion in opaque accounting made The optimism surround- ads as on personal com-
the fourth quarter. If not for it difficult to know just how ing Alphabet stems in part puters because the smaller
employee stock expenses much profit Google reaped from hopes that the com- screens on smartphones
and certain other items, from its primary business — pany is developing more have been seen as an im-
Google said it would have selling digital ads next to financial discipline as it dis- pediment. That’s one rea-
earned $8.67 per share. everything from search re- closes more earnings de- son Google’s average ad
That figure easily topped sults to YouTube videos. tails. Google had become rates, measured as “cost
the average estimate of In the fourth quarter, known for its free-spending per click,” have been de-
$8.10 per share among an- Google produced an op- habits and reluctance to clining for more than four
alysts surveyed by FactSet. erating profit of $6.8 billion, share information with ana- years.
The earnings report pro- excluding employee stock lysts. In the latest quarter,
vided the most detailed expenses, on revenue of The change in sentiment Google’s cost per click
breakdown yet on the $17.1 billion, after subtract- coincided with Google’s fell by 13 percent from the
profits pouring in from ing ad commissions. That hiring of a new chief finan- same time in 2014. But Po-
Google’s dominant search translates into a whopping cial officer, Ruth Porat, last rat cited in increase in mo-
engine and ad network. profit margin of 40 percent. May. Porat, a Wall Street bile search requests as one
(Google reorganized itself Meanwhile, Alphabet’s veteran, has consistently of biggest reasons that
under Alphabet last Octo- other companies together signaled her intent to rein in Google’s revenue rose by
ber.) Investors pushed up produced an operating spending. 18 percent from the pre-
Alphabet stock $44.23, or vious year. As people in-
more than 5 percent, to creasingly search for infor-
$815 in extended trading. mation and shop on their
Based on that after-hours phones, the company ex-
bump, Alphabet surpassed pects advertisers to ramp
Apple as the world’s most up their spending on smart-
valuable publicly traded phones, too.q
company. According to
calculations from S&P In-
dices, Alphabet was worth
$571 billion versus $538 bil-
lion for Apple.
That ranking, of course,
could shift again in regular
trading Tuesday.
Apple’s stock has been
sliding amid concerns
about a slowdown in
iPhone sales. Alphabet’s
stock has surged by 45 per-
cent since the end of 2014
when it was still trading un-
der Google’s name.
The fourth-quarter report
marks the first time Alpha-
bet has spelled out the
costs of running still-exper-
imental businesses that
are trying to do everything
from eliminating human