Dive Brief:
- Monday, Alphabet reported that its revenue rose 19% to $17.3 billion in its fourth quarter, beating analysts’ average estimates of $16.9 billion.
- It was the first earnings report to separate Alphabet’s various companies, which includes its core business Google.
- When the markets opened Tuesday morning, Alphabet was officially the most valuable company in the world, taking the title away from Apple. Its market capitalization is now $542.2 billion.
Dive Insight:
Alphabet said its earnings were bolstered by robust sales from online advertising. But the company’s "Other Bets" category, which was established to pursue new and emerging businesses like robotics, Internet-beaming balloons and health-care research, had an operating loss of $3.57 billion for the year.
Google's massive search-ad operation is basically functioning as an incubator for Google’s "Other Bets," which includes its self-driving car project and glucose monitoring contact lens. Though "Other Bets" is currently operating at a loss, some analysts think that some of the company's endeavors may eventually pay off.
Google said in August that it was restructuring in order to better manage its various businesses. In October, Google officially came under its new parent company. Company officials said Google would focus on core Internet-related businesses while its research projects would operate as separate subsidiaries.
