Crunchbase - A Peek Inside Alphabet’s Investing Universe
This Crunchbase article provides a wonderful collection of information and graphs showing the investment activity and profile of Alphabet (Google) and other peers. The graphs provide a snapshot and summary of the following elements:
- Count of Corporate Investment Deals
- Investment by Alphabet's Main Financial Arms
- The Alphabet Investment Universe
- Top Acquirers of Alphabet-Backed Startups
Some readers may not know of the relationship between Google, Google founders, SolarCity and Tesla which is also provided in the article.
Alphabet a Global Disruptor in Many Sectors Seeks to Remain Unconventional for the Future
Sundar Pichai CEO, and Ruth Porat CFO, of Alphabet together delivered the Alphabet Q4 webcast yesterday. Google reported its first US$100B plus revenue year.
Links to the Q4 report, the Q4 webcast and an interview with Eric Schmidt about the future employment needs of America are placed at the end of this article.
"Our business is driving great growth, with 2017 revenues of $110.9 billion, up 23% year on year, and fourth quarter revenues of $32.3 billion, up 24% year on year. Our full year operating income growth continues to underscore our core strength, and on top of this, we continue to make substantial investments for the long-term in exciting new businesses," said CFO Ruth Porat.
One of the world's largest disruptors announced it is going on a U.S. hiring spree and increasing its footprint outside of Silicon Valley. Alphabet announced plans to add facilities in 9 nine additional states. The company already has offices or data centres in 21 states and is also planning a massive expansion only 13 miles from its current headquarters in San Jose.
"Last year in the US we grew faster outside the Bay Area than in the Bay Area. To support this growth, we will be making significant investments in offices across nine states, including Colorado and Michigan. We plan to hire thousands of people across the U.S. this year," said CEO Sundar Pichai.
Increased attention on tech company hiring in the United States and political pressure to invest and create jobs locally has resulted in a number of announcements since mid December. In addition to Google's plans, Amazon is adding a second HQ site with the promise of 50K new jobs, Apple is investing US$30B and will create 20K new jobs and Facebook is doubling its US based data centers from 5 to 10 which together with their new monitoring group is likely to employ 3-5K new jobs.
Eleven years ago Sergey Brin and Larry Page wrote the original founders letter for Google. In that letter they stated:
“Google is not a conventional company. We do not intend to become one...
We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant."
The Google Founders and 'C' level management continue to be excited about seven things:
- Getting more ambitious things done.
- Taking the long-term view.
- Empowering great entrepreneurs and companies to flourish.
- Investing at the scale of the opportunities and resources we see.
- Improving the transparency and oversight of what we’re doing.
- Making Google even better through greater focus.
- And hopefully… as a result of all this, improving the lives of as many people as we can.
Alphabet Earnings Release 2018Feb01
Alphabet Webcast 2018Feb01
Eric Schmidt Former Alphabet Chair Discusses Employment Needs in America
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With a market capitalization of US$565 billion (+/-) Alphabet moves past Apple the former leader at US$539 billion.
Alphabet Inc. (Google) released its quarterly earnings report after the market closed yesterday and moved past Apple to become the world’s most valuable public company.
What does this mean? With the huge shift in economic and market paradigms it is becoming obvious that capital is moving away from devices toward ecosystems and services. Those who seek funding and those who invest need to pay close attention to where capital moves so they are not disadvantaged.
Furthermore, those involved in manufacturing, distribution and retail must also understand the meaning of this revolution. If capital is rewarding those who help consumers discover products and services more than those who produce, there are large implications for investments in technology, marketing, communications and media.
While Apple blames a slow quarter, the evidence suggests Alphabet was moving ahead since reporting its second quarter profit in July, 2015. Since then Alphabet has risen 28% while Apple’s shares have fallen 25%. Moreover, Alphabet continues to beat the Wall Street projection. Meaning the market guru's have been slow to respond to the shift in the flow of capital.
According to S&P's Silverblatt, achieving this milestone makes Alphabet the 12th company to achieve the title of most valuable company in the history of the index. Apple became the 11th company in August 2011. Other companies have also held the crown. They include Exxon (XOM -2.54%), IBM (IBM -1.45%) and Microsoft (MSFT -2.61%). Surely this places ecosystem and services ahead of energy, machines and software.
While Google executives hear the footsteps of large social media players like Facebook, it must be satisfying to see that building the largest ecosystem in the world has made them the market leader. Small emerging companies who are building ecosystems with the trust of an active subscriber base are on the right track. The patient building of subscriber services will be rewarded as capital gets wise and moves toward them.
