Google’s parent company, Alphabet, has dethroned Apple as the most valuable company in the world. Bringing in $21.3 billion in revenue and earnings of $8.67 per share, the company surpassed analysts’ predictions of $20.8 billion in revenue and earnings of $8.09.
Following the release of its fourth-quarter earnings, Alphabet’s market cap jumped eight percent before eventually closing at $558 billion, approximately $23 billion above Apple’s market cap.
“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,” CFO Ruth Porat said.
While Apple’s stock did not perform very well this past year, Alphabet’s was on the rise in the past 12 months.
The increase in Alphabet’s share price can be attributed to the clarification of its businesses. Google renamed itself Alphabet to better reflect the enterprises it controls —properties such as YouTube and Android— as well as investments in new technologies like high-speed Internet fiber networks and autonomous cars.
Google’s core businesses continue to grow as well, noting that Gmail grew to one billion active users. As far as its core advertising business, cost-per-click fell 13 percent, while paid clicks increased 31 percent year-over-year. Such a trend for is due to more activity shifts to mobile devices, which tend to cause advertisement clicks to go down.
While it’s a huge milestone for Alphabet, Apple shouldn’t be counted out especially as the company works toward launching the new iPhone this year.
Source: ABC News and TechCrunch
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