Last week Alphabet Inc., the parent company of Google has topped the list of the world’s most valuable publicly traded company. Earlier Apple was crowned with the title with $535 billion market capitalization.
Alphabet Inc. earned $4.9billion on revenue of $21.3billion in the fourth quarter and over the expectation of market research analysts. The software company earned $.58 more i.e. $8.67 per share compared to estimated $8.09 on $20.8 billion in revenue.
Last year Google has revamped their organizational structure and brought all their businesses under Alphabet - since then the company performed very well. The company’s core business search engine marketing has increased significantly - paid clicks increased by 31% year-over-year. Based on that good results, the Alphabet’s market value now stands at $558 billion while Apple’s was at $535 billion.
From last couple of months, Apple’s stock has been sliding amid concerns over slowing iPhone sales. Meanwhile, Alphabet’s stock has surged by 45% since the end of 2014 when it was still trading under Google’s name. In last quarter Google has produced an operating profit of $6.8 billion on revenue of $17.1 billion, after subtracting ad commissions that translate into a whopping profit margin of 40%. On the other side, Apple registered an operating profit margin of 32% in the last quarter.
Ruth Porat who joined the company on May last year said in the statement with the earnings report
“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,”
Though Alphabet’s primary ventures performed very well some of its subsidiaries were also a cause of concern for the company. Other companies together produced an operating loss of $1.2 billion on revenue of just $151 million.
After Sundar Pichai named the CEO of Google the company changed some of their strategic decision. Search trends on Google form the last couple of years has shifted from desktop to mobile - that led the company to focus on the mobile advertising business.