Alphabet (Google) becomes the first world capitalization – The World

Le Monde | 02/02/2016 at 3:05 • Updated 02/02/2016 at 3:25 | By Stéphane Lauer (New York, corresponding)

The parent Google alphabet was not at fault for its first annual results under that name. The group released Monday 1 ^st in February, well above results with analysts’ expectations, which has boosted the action of more than 6% to 796 dollars in the exchange after market. A progression that allows the company Mountain View (California) to become the first world capitalization before Apple. Monday night, Alphabet, which gained over 45% in one year, worth $ 555 billion, against 534 billion for the iPhone maker, whose sales start to level off.

This publication was much awaited since, for the first time, the company communicated separately on the results of its main activities (its search engine, YouTube video site and the operating system for mobile phones, Android) and those its Galaxy subsidiaries that invest in future technologies. A supposed initiative to give a clearer picture of both the profitability of its core business, focused on advertising on the Internet, and the weight of investments in activities that range from health (Calico) to the autonomous car without driver ( Google X), through home automation (Nest) and venture capital (Google Ventures), grouped internally under “Other paris.”

main activities The turnover achieved in 2015 was up 13.5% to 74.54 billion dollars in operating profit up 23% to 23.4 billion. These results, boosted by a fourth dynamic quarter, show that the group arrives to accelerate on its core business, which compensates for the costs of the party “Other paris.”

So the “paid Click “paid clicks, that is to say the number of times people click on ads published on sites using Google technology jumped 31%. The challenge now is to improve the profitability of mobile phone. For now, the group has not succeeded in bringing advertisers to pay the same rates as on a computer, they broadcast messages whereas on smaller screens have less value.

This is one of the reasons that the “cost per click” was down for four years. In the fourth quarter, it still fell 13% compared to the same period of 2014. However, as pointed out the new financial director of the group, Ruth Porat, during a conference call, this decline is largely compensated by the exponential growth of research on mobile phone. This explains the 18% increase in sales between October and December. The group hopes that the acceleration of this mutation will eventually convince its customers to agree to pay more mobile.

Astronomical Profitability

At the same time Gmail has exceeded the fourth quarter of a billion users. After Android, Chrome (the browser on the Internet), YouTube or Google Play (the online store), messaging Google is how the seventh service having crossed the psychological threshold.

The separation the publication of the different activities allows for unobstructed astronomical profitability by Google, which in the fourth quarter posted an operating margin of 40%, eight percentage points better that Apple, which was hitherto benchmark in profitability .

In addition to these activities, very profitable, Alphabet setting the future to gradually take them over. The division “Other paris” has posted a turnover up sharply from 37% in 2015, but at the same time, losses have widened to 3.57 billion dollars against 1.94 billion the last year. Just the fourth quarter, the loss amounted to 1.2 billion.

These figures have claimed some teaching with investors, which for the first time were able to measure consumption capital required by these activities. This is the role that now rests with Ms. Porat, a former Morgan Stanley, which was debauched in gold to give more visibility to the maquis of promising investments. She emphasized that the goal was to optimize the resources of this portfolio, the turnover was mainly driven by Nest, Google Fiber (fiber) and Verily, a subsidiary specialized in life sciences. “We make a journey and it’s still the beginning,” , warned Ms. Porat.

For those who would care to soaring costs of this division, boss of Google, Sundar Pichai, said the success of its search engine, for example, was also the fruit of heavy investment. He has praised the progress made by the group in the field of artificial intelligence, recalling that one of his machines had managed to fight for the first time a master of Go game. It is also a kind of go game in which Google is committed to financial markets. His goal: to maintain their position vis-à-vis patience of futuristic projects continuing to generate solid profitability in its core business

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