Google kicks Apple in its valued assets

Monday, 08 Feb, 2016

Revenue from Alphabet's core business rose 14 percent to $74.54 billion past year while operating income, excluding stock-based compensation, jumped 23 percent to $28 billion.

Shares in Alphabet rocketed in the wake of the news, fell back to close 1.2% up at US$752, but rose in after-hours trading to US803.03. Before that, Apple moved past Google to become the most valuable tech company in 2010.

While Apple still enjoys a larger cash pile than Alphabet (more than $200 billion vs. $73 billion, respectively), the latter's market capitalization (shares outstanding multiplied by the share price) is now roughly $570 billion vs. $535 billion for Apple.

Alphabet, which rejigged its operating structure previous year to separate its core Google business from its so-called "moonshots" also broke out results for these operations for the first time on Monday.

Apple had a rocky earnings call last week, with sluggish sales of the iPhone 6S disappointing analysts.

"It's hard to believe that Google was the more valuable company from the time of its IPO in 2004 until April 2008".

Microsoft Corporation (NASDAQ:MSFT) Open-Sources Machine Learning Toolkit
Microsoft's CNTK deep-learning toolkit is claimed to outperform all rivals, including Google's recently-released TensorFlow . Last November, Microsoft made much the same move with its Distributed Machine Learning Toolkit (DMTK).

The strong revenue growth was a return on years of investment in mobile search, YouTube and so-called programmatic advertising, which involves ads being sold automatically using software, added the Ruth Porat.

Alphabet shares (GOOGL) were up 6 pct after Google's parent posted estimate-topping fourth-quarter results following the final bell. That requires the type of heavy spending seen a year ago from Alphabet.

The rise puts Alphabet's value at $549bn (£382bn) compared to Apple's market capitalisation of about $534bn (£371bn).

"Essentially, what they have now is a big advertising business and a venture capital business", Forrester analyst Frank Gillett said of the new earnings presentation. Alphabet would need to soar another 46% to top Apple's record market cap. Google continues to grow strong, reporting much better-than-expected sales and profit for the fourth quarter. That was before the iPad and before the iPhone 4 established Apple's dominance in mobile computing. The existing Google shareholders became shareholders of the new holding company.

"It looks like Google continues to execute on mobile advertising", says Neil Doshi, Mizuho Securities Research Managing Director.

The "Other Bets" component of the business includes projects such as life sciences and self-driving cars, among the various other thing technology that Alphabet is looking to pioneer.