Al­pha­bet

Share price: $920.67 P/E: -

Finweek English Edition - - COVER STORY -

Al­pha­bet, which owns Google and YouTube, grew rev­enues by 22% in the fourth quar­ter of 2016 to over $21bn, and re­ported mar­gins of 31% while still spend­ing bil­lions of dol­lars de­vel­op­ing ev­ery­thing from self-driv­ing cars and other ar­ti­fi­cial in­tel­li­gence ap­pli­ca­tions to re­search­ing a cure for age­ing.

At the end of the last quar­ter, Al­pha­bet had cash and mar­ketable se­cu­ri­ties of $86.3bn.

CEO Sundar Pichai said that 2016 had been the year that ar­ti­fi­cial in­tel­li­gence “be­came cen­tral to who we are as a com­pany and the prod­ucts that we built”, and that Al­pha­bet had had more than 350 launches pow­ered by ma­chine learn­ing across ar­eas like Search, Maps, Mes­sag­ing and Google Play.

Coro­na­tion's Surve says there are still big op­por­tu­ni­ties to in­crease ad­ver­tis­ing spend. “Peo­ple are spend­ing a lot more time on­line but ad­ver­tis­ing hasn’t quite caught up.

“Google is the dom­i­nant search plat­form, it owns the lead­ing video plat­form, and ad­ver­tis­ing is be­com­ing more tar­geted and mea­sur­able,” she says. It has sig­nif­i­cant com­pet­i­tive ad­van­tages and uses search his­to­ries and query logs to im­prove its search func­tion­al­ity. “And with bet­ter prod­uct you get more peo­ple search­ing so it is a vir­tu­ous cy­cle.”

“Google is the dom­i­nant search plat­form, it owns the lead­ing video plat­form, and ad­ver­tis­ing is be­com­ing more tar­geted and mea­sur­able.”

Google car

Sundar Pichai CEO of Al­pha­bet

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