Cloud and search giant Google
– which recently set up Alphabet as an umbrella company for the whole Google operation – has become the world’s most valuable company. It replaces Apple whose reign in pole position lasted since it took over from Microsoft in 2010. With revenues of $4.9 billion in the fourth quarter of 2015, Alphabet/Google now has a combined value of around $567 billion, beating Apple’s $535 billion valuation. The news pushed Alphabet/Google shares up 9%.
While Apple has struggled with competition in the mobile phone market, Alphabet/Google’s advertising business has flourished. The company successfully overcame the challenges of the internet’s move to mobile devices and its operating income increased to $23.4 billion through increased online advertising - pay per click advertising alone was up 31%. However, it is Alphabet/Google’s other ventures that are fuelling investor interest.
With projects like Project Loon (helium balloons that facilitate the Internet), Project Skybender (internet drones reportedly being tested to deliver 5G internet), driverless cars and Google Glass, Alphabet/Google has captured the imagination of investors who foresee a lucrative future. Despite a number of projects in the pipeline, Apple on the other hand might be considered as delivering the same old products and services. What do you think of Alphabet/Google’s success? Let us know your thoughts. Add your comments below.