Google’s Parent Company Alphabet Now More Valuable Than Apple Says Earnings Report

Google’s parent company 'Alphabe't has just been valued more highly than Apple in the latest earnings report. This means that Alphabet is now the world’s most valuable company.

What Happened?

In terms of the most recent event, Alphabet’s big increase in profit for the last quarter triggered an increase in its share price of around 9% in after-hours trading. Recent estimates of Alphabet’s current worth put the figure at around $568bn compared to Apple’s $535bn.

What is more, price forecasts from many analysts indicate that Alphabet could even be valued at as much as $734 billion in the next 12 months.

Why Did It Happen?

The short answers as to why Alphabet has moved ahead in terms of value are Google’s sales of advertising on mobiles plus the greater potential that the market sees in Google thanks to its experimental ventures such as self-driving cars and internet balloon programs.

One of the reasons why the brakes have been applied to Apple’s value has been the much publicised reduction in demand for signature iPhone (especially in China), and the apparent lack of potentially great future products.

Mobile advertising has worked out to be such a great boost for Google at the current time (and therefore Alphabet) because mobiles are moving much more quickly ahead now for Google searches and therefore the mobile ads have been able to be move closer in value to desktop adverts.

The monetisation of YouTube and YouTube’s continuing popularity, particularly among the millennial generation have also contributed to Google and Alphabet’s market value dominance.

In the UK Google’s revenue increased by 16% in the 4th quarter, but Google’s image is currently suffering some negative forces as the amount that the company has paid to cover 10 years’ of tax (£130 million) is seen by many as being too little.

What Does This Mean For Your Business?

In essence Google is therefore winning several wars in the battle for positive 'mindspace' among business owners, and figures show that businesses are investing heavily in mobile advertising as well as continuing to use Google as a first stop for searches and are relying on Google as the major supplier of online traffic (preferably natural where possible).

The latest news also indicates of course that businesses can probably expect to keep paying higher rates for mobile ads. There are also of course the many possibilities of brand extension that Alphabet companies like Google could use to market more products and services to us.

Some commentators however are predicting a boost in Apple’s fortunes again with the iPhone 7 UK launch in September. Time will tell.