14 DAY TRIAL // Alphabet Inc., Google’s parent company following the restructuring a few years back, has reported earnings of $26 billion for the last quarter of 2016, climbing 22% from the same period of the previous year.
The numbers reflect the first quarter with the Google-made Pixel and Home, but most importantly, indicate that the many moonshot projects the company is cooking up are finally starting to make some money.
Alphabet’s CFO Ruth Porat mentioned that there is now a great momentum in Google’s newer investment areas, namely hardware, and ongoing strong progress in Other Bet. This “Other Bet” category actually includes those particular moonshot projects that they’ve been investing in for many years. According to data from Alphabet, this particular category of projects made $260 million in sales during the last three months of 2016. At the same time, the investments made in said projects dropped from $1.21 billion in 2015’s fourth quarter to $1.08 billion this year.
Smarter investing
Some projects that have garnered some attention are in various stages of evolution. For instance, the delivery drone Google has been working on is on pause, Project Titan which sought to bring Internet to remote locations via drone has been shut down, while the Terra Bella satellite division is being sold off.
“The internal transparency we've provided to our business leaders across the Other Bets and Google is helping us to allocate resources more thoughtfully across the opportunities that we see,” Porat said during a conference call.
For the fourth quarter of 2016, Alphabet’s net income was of $5.3 billion, so there’s loads of money to invest in various projects this year.
Sundar Pichai, Google CEO, said that 2016 was the year when Artificial Intelligence and intelligent computing became central to who Google is as a company and the products that it builds. Despite great results in this area, Alphabet’s chief financial officer admits that the growth for the quarter was led by mobile search and YouTube.