Page 23 - Aruba Today

TECHNOLOGY A23
Google parent tops Apple as world’s most valuable company
MICHAEL LIEDTKE
AP Technology Writer
SAN FRANCISCO (AP) —
Alphabet, Google’s new
parent company, topped
Apple as the world’s most
valuable business in after-
hours trading Monday af-
ter reporting surging earn-
ings.
Alphabet Inc. earned $4.9
billion in net income on
revenue of $21.3 billion in
the fourth quarter. If not for it difficult to know just how
employee stock expenses
and certain other items,
Google said it would have
earned $8.67 per share.
That figure easily topped
the average estimate of
$8.10 per share among an-
alysts surveyed by FactSet.
The earnings report pro-
vided the most detailed
breakdown yet on the
profits pouring in from
Google’s dominant search
engine and ad network.
(Google reorganized itself
under Alphabet last Octo-
ber.) Investors pushed up
Alphabet stock $44.23, or
more than 5 percent, to
$815 in extended trading.
Based on that after-hours
bump, Alphabet surpassed
Apple as the world’s most
valuable publicly traded
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
Tuesday 2 February 2016

In this Nov. 12, 2015, file photo, a man walks past a building on the Google campus in Mountain ways been a little muddy,”
View, Calif. Alphabet Inc., Google’s holding company, reports financial results Monday, Feb. 1, said Edward Jones analyst
2016. Josh Olson. “The hope now
is that management will
Associated Press continue to show greater
cost discipline.”
drivers to curing cancer. loss of $1.2 billion on rev- Under the previous setup Google is also counting
Until now, the expenses of enue of just $151 million. at Google, “things had al- on advertisers to gradu-
running those peripheral Alphabet labels that cate- ally pay more for market-
operations had been hid- gory “other bets.” That loss ing messages on smart-
den in Google’s financial also excluded employee phones. They still aren’t
statement. The company’s stock expenses. paying as much for mobile
opaque accounting made The optimism surround- ads as on personal com-
ing Alphabet stems in part puters because the smaller
much profit Google reaped from hopes that the com- screens on smartphones
from its primary business — pany is developing more have been seen as an im-
selling digital ads next to financial discipline as it dis- pediment. That’s one rea-
everything from search re- closes more earnings de- son Google’s average ad
sults to YouTube videos. tails. Google had become rates, measured as “cost
In the fourth quarter, known for its free-spending per click,” have been de-
Google produced an op- habits and reluctance to clining for more than four
erating profit of $6.8 billion, share information with ana- years.
excluding employee stock lysts. In the latest quarter,
expenses, on revenue of The change in sentiment Google’s cost per click
$17.1 billion, after subtract- coincided with Google’s fell by 13 percent from the
ing ad commissions. That hiring of a new chief finan- same time in 2014. But Po-
translates into a whopping cial officer, Ruth Porat, last rat cited in increase in mo-
profit margin of 40 percent. May. Porat, a Wall Street bile search requests as one
Meanwhile, Alphabet’s veteran, has consistently of biggest reasons that
other companies together signaled her intent to rein in Google’s revenue rose by
produced an operating spending. 18 percent from the pre-
vious year. As people in-
creasingly search for infor-
mation and shop on their
phones, the company ex-
pects advertisers to ramp
up their spending on smart-
phones, too.q