21 ms·

Alphabet Becomes the Most Valuable Public Company in the World

720 points by pearlsteinj 11y ago

cryptoz 11y ago
The comparisons between Google and Apple aren't as apples-to-apples as everyone in the media seems to think. If we're talking about the future of these companies, and their earning power, they are situating themselves very differently. Apple is really a consumer electronics company, Google is an artificial intelligence company. And investors think more money will be in the future of AI instead of consumer hardware and software, so even though Google's earnings are smaller than Apple's, the future earning power is so much more. If Apple starts going faster on AI then I think it will be very interesting between these two companies.
- jonesb6 11y ago
  I absolutely agree that comparing Google and apple is silly. But calling Google an "artificial intelligence" company is just feeding another buzzword into the fire.
  - jonknee 11y ago
    Why? It's obvious that is where they are going.
    - rsp1984 11y ago
      Where they are going yes but not what they are today.
      - Mangalor 11y ago
        AI is basically learning technology, and they already employ AI in search ranking.
      - jonknee 11y ago
        Wall Street values you based on future expectations and Google is being valued in part for its perceived lead in AI and the growth that will bring. Their main product (search) uses plenty of AI so it's not a stretch whatsoever.
    - mwfunk 11y ago
      Calling someone an "X company" means that they make their money from X. There are aspects of AI in targeted advertising, but not enough to call them an AI company rather than an advertising company. It doesn't really matter where they're going- that's what they aspire to be, not what they are. If you judge companies based on their aspirations, you end up judging them based on their most positive and idealistic version of themselves, rather than what they are, which is much more meaningful. A much more cynical way to look at it is, judging a company based on its aspirations means judging them based on their marketing rather than their products, services, or actions. Think of how differently Comcast would be perceived if everyone wanted to talk about the company Comcast wishes it was, rather than company that it is. Or any company you don't like for whatever reason.
      - lazaroclapp 11y ago
        How about "Alphabet/Google is trying to position itself as an AI company" instead of "is an AI company". That direction is still important to explain why it is valued like it is: investors are betting that it has good chances of succeeding in becoming an AI company.
      - skybrian 11y ago
        The stock price of a company is based on predicting future earnings, so talking about the future of a company is pretty much unavoidable in this sort of discussion. You can ignore what management says and predict the future in some other way if you prefer, but ignoring the future entirely isn't possible. (Assuming that nothing will change is also a prediction.)
      - dragonwriter 11y ago
        > Calling someone an "X company" means that they make their money from X. Sure, but even so (except for the way some people treat Google), we typically call companies that make their money by placing ads in a service or media offering an "X company" where X describes the service or media offering, not "advertising". From that perspective, Google is an online services company, with AI playing an important role in some of its services.
    - jfuhrman 11y ago
      How much of Google's profit(or even revenue) is not from tracking user data and advertising? Search, Gmail, Android, Chromebooks, Nexus, Pixel, Youtube, Maps etc. everything is about selling advertisements after scanning user provided data. The rest are either loss leaders or moats, or ones with unclear monetization scenarios like Fiber. One exception is GCE and GAE, but I don't know how much profit/revenue they're making. I would count Google Apps, but until recently they were scanning even paid Google Apps for Business accounts for ad tracking purposes.
      - stvswn 11y ago
        Your question is answered explicitly in the press release, if you wanted to Google it. But are you instead making a point about how that's bad or something? The business model is to give away services for free and then show ads to monetize, that's no secret. Do you contend this is a poor business model, or somehow immoral or something?
        jfuhrman 11y ago
        If you follow the thread, it's about calling Google an AI company.
      - jonknee 11y ago
        They use AI to sell advertising and services (be it search relevancy, contextual awareness, filter out spam, etc)... The reason why it's not incorrect to call Google an AI company is that Wall Street thinks they'll be able to shake out ever more cash from their machines in the future because of their position in ML and AI. It's their competitive edge and one that becomes more and more valuable as software continues to eat the world.
      - krakensden 11y ago
        Eric Schmidt has been claiming that fiber is making good money. Which doesn't seem impossible.
  - shimon 11y ago
    Google's flagship product is a box that you can type words into, and get relevant texts/references/facts in response. It seems like a textbook example of AI.
    - rimantas 11y ago
      AI with quickly advancing dementia.
    - drewrv 11y ago
      AI is whatever hasn't been done yet https://en.wikipedia.org/wiki/AI_effect#AI_is_whatever_hasn.27t_been_done_yet https://en.wikipedia.org/wiki/AI_effect#AI_is_whatever_hasn....
      - taneq 11y ago
        Precisely. The image recognition and natural language processing that's "just a deep learning algorithm" today would have blown the socks off anyone ten years ago. Chess playing programs were AI until they could decisively beat all humans, and then we decided that chess doesn't require intelligence. Self-driving cars were AI until they got close to market and now apparently driving a car doesn't require intelligence. It would seem that only True Scotsmen are intelligent.
        dhimes 11y ago
        Don't forget that Facebook is going to be a big player in this game as well- especially facial recognition, where everybody is helping them by tagging people in their photos.
        tajen 11y ago
        If we characterize companies as strongly as "Apple, a consumer product company" and "Google an AI company", then Facebook is a worldwide identity tracking agency. They could pivot and be in charge of delivering birth certificates, DNA groups, ethnicity mapping, insurance-bank-police profiling... In fact I expect it to play a very major role in wars to determine targets.
  - abraham6464 11y ago
    “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?” “Oh, we’re really making an AI.” -Larry Page [0] [0] http://www.wired.com/2014/10/future-of-artificial-intelligence/ http://www.wired.com/2014/10/future-of-artificial-intelligen...
  - deciplex 11y ago
    They mostly use the AI to try to convince you to buy shit. It may be an uninspired use of artificial intelligence, but it's still artificial intelligence.
  - osoti 11y ago
    Cutest Exotic Animals you can Legally have as Pets http://goo.gl/tlx5LD http://goo.gl/tlx5LD
  - turingbook 11y ago
    Actually, Larry Page himself thought from very early beginning that Google is an AI company: AROUND 2002 I attended a small party for Google—before its IPO, when it only focused on search. I struck up a conversation with Larry Page, Google’s brilliant cofounder, who became the company’s CEO in 2011. “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?”… But Page’s reply has always stuck with me: “Oh, we’re really making an AI.” http://www.wired.com/2014/10/future-of-artificial-intelligence/ http://www.wired.com/2014/10/future-of-artificial-intelligen...
- whitegrape 11y ago
  Nerds have known for years that Google is really an AI company, but do investors really see things that way yet? The stock didn't go up with the announcement of AlphaGo, though that could just be because they think that particular AI work won't give Google any competitive advantage in future revenue...
  - azinman2 11y ago
    It's been a machine learning company. We'll see what the shift to AI looks like, but those are two very different things.
- Steko 11y ago
  > investors think more money will be in the future of AI instead of consumer hardware and software No, first you are mistaking a bet on a single company for a bet on an industry. The obvious counterexamples being that there are no shortage of wannabe AI companies valued orders of magnitude lower than Apple, that doesn't mean wall street thinks devices beat ai as an industry gold mine. Google is valued highly today because they print money today. They print money because of search and advertising. They are really good at this and that's why their market cap exceed's Apple's today. These prices are not remotely rational. There's no serious investor that thinks Apple is going to shut the lights off inside 7 years which is what the current 'market cap' would tell you.
  - bradshaw1965 11y ago
    ... Google is valued highly today because they print money today. They print money because of search and advertising. They are really good at this and that's why their market cap exceed's Apple's today. ... That would be correct if they were value companies throwing off discounted cash flow but both Google and Apple are priced as growth companies. The market believes Apple has peaked in growth and that Google has a bit more potential. It's not clear why exactly from the earnings report of the holding company. Revenue for Google is 99% ad sales so it's not clear exactly where that bottom line revenue is going to come from. All revenue from the rest of the holding company was less then $500 million.
    - CydeWeys 11y ago
      > That would be correct if they were value companies throwing off discounted cash flow but both Google and Apple are priced as growth companies. AAPL's P/E ratio as I write this is 10.26. I would strongly make the argument that Apple is thus NOT priced as a growth company.
      - simonh 11y ago
        Which shows you how much the market knows. Apple's PE ratio was 11 back in 2009. In fact the first years of the iPhone corresponded with a precipitous plunge in their PE ratio as their revenues rose rapidly, but their share price was dragged kicking and screaming along behind them.
- jdoliner 11y ago
  I feel like this comparison of the two started during the handset wars. If you'll recall they were very chummy companies before that with Eric Schmidt sitting on both boards. With the handset wars cooling down a bit I think the comparisons are becoming a lot less apt.
- bradshaw1965 11y ago
  Both companies will struggle for the kind of revenue growth Wall Street is looking for. Ad sales account for 99% of Google revenue, with speculative ventures generating less then $500 million. It's all about finding products and services that people are willing to part with cash.
  - imaginenore 11y ago
    Self-driving cars market can probably double Google's value when it takes off.
- tn13 11y ago
  I agree that they aren't same but I doubt if Apple is even in the same league as Google when it comes to AI. Apple is a product company that makes iOS+Hardware for profit and also seeks rent to access this platform. Google is synonymous with search/advertising which is fancy word for media. For google that media comes first and platform monopoly comes second. That is why Google continues to offer all its services on iOS despite virtually owning Android. For every product that Apple builds in future its success will be like a toss of a coin (of course biased). Google succeeds no matter which platform succeeds.
- peter303 11y ago
  AI had big VC run in the 1980s. At that time it focused on expert stems and logic computing. Now the emphasis is on big data and deep learning neural nets. Google can afford to nuture a technology for a decade while VCs wont.
- petke 11y ago
  Also apple only spends about 3% of revenue on R&D. Google spends about 15% (and so does ms) if i remember correctly. I think at some point this is going to show. If apple isn't careful they might end up making the pretty but dumb phones of tomorrow.
  - aroman 11y ago
    If you consider the fact that Apple's revenue is almost four times that of Google's, the actual difference in spending is not very substantial. Presumably there's some point of diminishing returns on R&D for one company in the billions of dollars range...
    - simonh 11y ago
      Indeed. Apple has been ramping up R&D spending by about 40% per year for many years, which is a phenomenal ramp up, it's just that its revenues have grown even more dramatically.
- Dolores12 11y ago
  Apple is an Iphone company, not consumer electronic one.
- partiallypro 11y ago
  Both are at "peak margin," but Google's margins will fall slower than Apple's. Hardware margins are notoriously hard to maintain, Apple is the outlier, and it can't last forever.
- apsec112 11y ago
  "Google is an artificial intelligence company." Google has great AI people - arguably more than anywhere else - but the bulk of the company is not based on AI. I'm a former Google employee, and up until a few years ago, most of the company was very skeptical of machine learning. Many people still are. I left because my machine learning project was canceled - a manager had an older solution that didn't use machine learning, and he didn't want his pet project to be replaced (even though it had worse performance and was much harder to use), so we were canceled while about fifty lines of code away from launching. Other parts of the company may be different, but in our product area AI was a minus, not a plus.
- HeavyStorm 11y ago
  Google is not an AI company. Google is a "knowledge" company. (Most of AI-like stuff from Google is actually a software that extracts relevant knowledge from a big database.) Google makes money from that crazy amount of information they have available, albeit we must admit that thus far, they haven't been able to turn a real business from most of it: the real profitable way they use that knowledge is to serve us ads.
- HSO 11y ago
  No need to make it about Apple vs Google or some newspaper narrative. In a world with negative short rates, money essentially becomes a "bad" (or negative good). Ceteris paribus, companies who deliver a lot of it today or in the immediate future will be valued less than those with cash flows farther out. I still think the market is making a mistake here, in that the real difference between Google's and Apple's investment projects is not in their nature ("moonshot" vs "mundane") but in their PR. Google just talks more about them. Given that investors think that Google's stream of cash flows is weighted towards the future and Apple's to the present, though, it makes sense that in the current rate environment valuations are as they are. See also Facebook, Amazon, or Netflix. No need for grand narratives about the relative merits, product and management philosophies, or management personalities. That said, I disagree with the market and am betting this is a bubble that will pop soon.
- 6stringmerc 11y ago
  >Google is an artificial intelligence company. That's an interesting take, because for many years I'm pretty sure the largest portion of their income was from advertising revenue. That makes them an ad firm. Yeah they've diversified, but let's be honest, they're in sales straight up first and foremost.
percentcer 11y ago
It's interesting to that it took this long, just considering the utility of each company. If Apple disappeared tomorrow I'd be moderately inconvenienced, I'd have to pick up an Android handset instead of my iPhone and maybe set up some new podcast feeds. If Google disappeared the world would screech to a halt.
- jad 11y ago
  How's that? To search the web, I'd go to DuckDuckGo or Bing or whatever. Other companies also provide web mail, maps, office document solutions, etc. Google's definitely better at those things, but using a worse version of those products would not cause the world to "screech to a halt." Probably the most disruptive thing if Apple vanished would actually be every tech company suddenly needing to figure out how to use Windows or desktop Linux.
  - sdrothrock 11y ago
    We could probably think of alternatives for most of these things, but there are a lot of people who just use what came with their phone/browser. Additionally, think of all of the Google-backed services out there provided by other companies. How many companies use gmail heavily that would lose all kinds of records? Normal people would lose their e-mail too, and businessmen would lose a lot of their calendars. The actual solution doesn't matter as much as the data already invested in Google's solutions that would be lost if Google just vanished.
    - tedmiston 11y ago
      And Google Takeout continues to ensure that won't happen.
      - Thirdegree 11y ago
        Only for people that proactively use it. Speaking of which, I should probably backup again.
    - 11y ago
0xCMP 11y ago
You're all talking about Google being more valuable as if Apple did not lose a ton of value since Jan 1 in the scares. Majority of the loss has been in generalized fear. Google hasn't really done anything to grow past them. They just stayed where they were and Apple fell below them. Lets please keep this in mind when we throw around ideas like one is better than the other as a result of this.
- modelmodel 11y ago
  What were the scares caused by?
  - 0xCMP 11y ago
    First off, never claiming to understand the whole stock market or being an expert. I'm am amateur trying to make sense of this. But here is what I know very tersely (at work, can't write a paper here.) China is highly leveraged and their stock market was crashing. Their very high spending is often accepted because of their continuing growth which people have been assuming was a lie for the past 7(?) years. They always say it's 7% growth. With a stock market crash people think that maybe people are waking up that the growth isn't there and China won't be able to sustain much longer. Thats not good for apparently many far reaching reasons. Oil is crashing for many reasons which you could speculate about but not know for sure. The reality for the US markets is that many smaller oil companies are highly leveraged because oil was so expensive and they were funded with the idea it'd stay above something like $50/barrel. Their methods are more expensive than say Saudi Arabia's methods which allow them to sell much cheaper (although they need revenue which they're offsetting by selling bonds). Here is where I'm lost a bit, but somehow this is tied to the banks again who might be in trouble if they all start failing. Not to mention people have been calling a correction for almost a year now based on debt levels, global banking issues, global economic issues, high P/E ratios, etc. to happen sometime around now till next year. The stock market fear indicators on money.cnn.com[0] were at extreme levels for several days in Jan. Plenty of issues with fear and emotions in the markets right now. Some of which are well placed fears. Apple was going down a lot during those periods of fear well before their earning call which is what has been sealing the deal. I think during that major sell off people thought it was the "top" and were getting out. [0]: http://money.cnn.com/data/fear-and-greed/ http://money.cnn.com/data/fear-and-greed/
pbreit 11y ago
Both tremendous companies. I actually wish Apple would deploy some of its know-how and capabilities a little more broadly. Not everything has to be an immediate $20 billion opportunity.
- draw_down 11y ago
  On the other hand, that product stance helps them avoid Google Reader-type situations.
  - lern_too_spel 11y ago
    Right, it gets them into more iTunes Ping situations.
    - draw_down 11y ago
      They certainly have failures, that's one of them. But nobody was sad when it got killed, you know? Nobody misses iTunes Ping or iAds or MobileMe.
      - sangnoir 11y ago
        > But nobody was sad when it got killed, you know Oh my, isn't that damning with faint praise? It's an indictment against Apple: Ping was so bad no one missed it.
        oldmanjay 11y ago
        Well, it's an indictment against Ping anyway. It would be mighty disingenuous to somehow suggest that level of failure is a statement of the possibility of future success for them considering how big their hits are.
        sangnoir 11y ago
        It's only disingenuous if you're stripping away the context of the thread, further upstream, ancestor comment said: >>>On the other hand, that product stance helps [Apple] avoid Google Reader-type situations. and GP replied: >>Right, it gets them into more iTunes Ping situations. followed by: >But nobody was sad when it got killed, you know? Nobody misses iTunes Ping or iAds or MobileMe Which is damning Apple with faint praise. >It would be mighty disingenuous to somehow suggest that level of failure is a statement of the possibility of future success for them considering how big their hits are That's a non-sequitur. No where in my comment did I extrapolate or attept to divine Apple's future failure/success.
BorisMelnik 11y ago
interesting adjective "most valuable." To many that equates to revenue generated, to others profitability. Haven't read this article but starred for later I'm curious to see what it says.
- glibgil 11y ago
  You might just star this thread for later commenting too
  - gist 11y ago
    The core, at least to me, of his comment was: "To many that equates to revenue generated, to others profitability" He happened to add that he would read the article which is why I am guessing as of when I viewed the comment it was heavily downvoted. The heavy handed downvoting is what I don't like about HN so quick to jump and assume there is no value in the comment. There was. Although I know the definition for sure there are "many" people who would read "most valuable" and not know the true definition. [1] [1] My point being there is value in the observation of people who aren't clued in to that fact.
- kirian 11y ago
  It's talking about Market Cap.
  - ghayes 11y ago
    Yes, which is basically how much someone would pay to own the company today = discounted expected long-term profits.
    - kidfire 11y ago
      Not at all true. Most obvious reason being control premium (which applies to all buyers, but lot of other reasons why price paid by a buyer would be different, for example expected synergies) Really just share price x shares outstanding - by one valuation method, share price in theory is driven by expected present value of future dividend stream, but even this is also very different from what you said (company's actual cash flow)
tyingq 11y ago
Paid clicks up 31% overall, on Google’s own sites, up 40%. That's a bit concerning to me, especially when you consider: a) That growth is outpacing internet traffic growth, and has for many years now. Internet traffic CAGR is 23%[1] b) The shift from desktop to mobile should have the effect of reducing clicks. c) Since some of the growth is video, I would expect a decrease in click growth related to this as well. Video adds to bandwidth growth pretty directly. Click growth would be less direct. Sergey and Larry, at least at one time, might have expressed concern: "The goals of the advertising business model do not always correspond to providing quality search to users"[2] [1] http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.html http://www.cisco.com/c/en/us/solutions/collateral/service-pr... [2] http://infolab.stanford.edu/~backrub/google.html http://infolab.stanford.edu/~backrub/google.html
- Jabbles 11y ago
  Why is any of that concerning? I'm not seeing the link.
  - malchow 11y ago
    I think he is suggesting that it is possible to drive growth in paid clicks by misdirecting organic click intenders to paid clicks. Of course, one imagines there are many other explanations for growth, too.
  - tyingq 11y ago
    Sergey/Larry explain it better than I would. http://infolab.stanford.edu/~backrub/google.html http://infolab.stanford.edu/~backrub/google.html Scroll down to "Appendix A: Advertising and Mixed Motives"
    - Jabbles 11y ago
      What does that have to do with this news though?
      - 11y ago
xyzzy4 11y ago
Good time to short Alphabet? I haven't looked yet but I bet their P/E ratio is bubble-ish.
- kbenzle 11y ago
  Yeh, at a PE of 36 I like what your saying, but still not close an the Amazonian 850+ PE!
  - xyzzy4 11y ago
    I think Amazon's revenue could grow another 10X though.
    - deleted 11y ago
      [deleted]
    - fixermark 11y ago
      ... which would put them at 85+ PE? That's still a lot of PE, isn't it?
    - gefh 11y ago
      Taking it to a P/E of _only_ ~100...
- Mikeb85 11y ago
  Maybe, maybe not. I doubt there's much upside, but generally mega caps don't have much volatility either...
  - xyzzy4 11y ago
    I wouldn't count on that. Apple seems to have a lot of volatility lately.
    - Mikeb85 11y ago
      Compared to what?
jfuhrman 11y ago
Well, abusing their search dominance among other things like making ads indistinguishable from organic results and paid placement on verticals like shopping/hotels etc. was eventually going to pay out. More details on how Google manipulated search rankings manually to make more money: From http://www.wsj.com/articles/how-google-skewed-search-results-1426793553 http://www.wsj.com/articles/how-google-skewed-search-results... >A previously undisclosed report by staffers at the Federal Trade Commission reveals new details about how Google Inc. manipulated search results to favor its own services over rivals’, even when they weren’t most relevant for users. >In a lengthy investigation, staffers in the FTC’s bureau of competition found evidence that Google boosted its own services for shopping, travel and local businesses by altering its ranking criteria and “scraping” content from other sites. It also deliberately demoted rivals. >For example, the FTC staff noted that Google presented results from its flight-search tool ahead of other travel sites, even though Google offered fewer flight options. Google’s shopping results were ranked above rival comparison-shopping engines, even though users didn’t click on them at the same rate, the staff found. Many of the ways Google boosted its own results have not been previously disclosed. >One way Google favored its own results was to change its ranking criteria. Google typically ranks sites based on measures like the number of links that point to a site, or how often users click on the site in search results. >But Marissa Mayer, who was then a Google vice president, said Google didn’t use click-through rates to determine the ranking for its own specialized-search sites, because they would rank too low, according to the staff report >Instead, Google would “automatically boost” its own sites for certain specialized searches that otherwise would favor rivals, the FTC found. If a comparison-shopping site was supposed to rank highly, Google Product Search was placed above it. When Yelp was deemed relevant to a user’s search query, Google Local would pop up on top of the results page, the staff wrote. >Other regulators have found similar practices. European antitrust authorities in 2013 said Google had a different, “specialized” search algorithm for ranking its own content. >To bolster its own listings, Google sometimes copied, or “scraped,” information from rival sites. According to the FTC report, Google copied Amazon’s rankings of how well products were selling, then used that information to rank its results for product searches. Amazon declined to comment. >While Google promoted its own results, it sometimes demoted rivals, the FTC staff found. For example, Google compiled a list of comparison-shopping sites and “demoted them from the top 10 web results,” staff wrote. According to the report, Google users in tests didn’t like the changes; only after Google tweaked its search algorithm at least four times, and changed the ranking criteria, did the new results get “slightly positive” feedback, the staff said. >Google’s efforts paid off, the FTC found. It said Google’s maneuvers reduced Web traffic to rivals, and increased traffic to Google sites.
pearlsteinj 11y ago
Also interesting to see in this earnings report is that Google's "other bets" aka moonshots are 3.5 billion in the red...[0] [0]https://abc.xyz/investor/news/earnings/2015/Q4_google_earnings/index.html https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
- toomuchtodo 11y ago
  I'd expect years, if not a decade for those to make money. I'm fond of how Google's voting structure is designed to prevent common stockholders from changing the direction of the company (for the same reason Elon Musk won't take SpaceX public until there are ongoing flights to Mars): investors are too concerned with short-term enrichment. If all of your ventures are making money hand over fist, you're not trying anything hard.
  - pearlsteinj 11y ago
    I totally agree, this is just the first glimpse we get into the finances of the moonshots.
wodenokoto 11y ago
What was the big jump for Google/alphabet I July?
- Lewisham 11y ago
  IIRC that was when reported earnings from mobile were higher than Wall Street expected. WS was expecting doom and gloom from mobile for a long time.
- ChaseT 11y ago
  It was caused by a positive earnings report. http://www.bloomberg.com/news/articles/2015-07-17/google-appreciation-day-as-record-60-billion-is-added-to-stock http://www.bloomberg.com/news/articles/2015-07-17/google-app...
dangoor 11y ago
Interesting that Apple's net profits last quarter was greater than Alphabet's revenue.
- metaphorm 11y ago
  many explanations for this but really at bottom the answer is that the two businesses are not comparable and this comparison is meaningless.
  - ant6n 11y ago
    The length of the discussion surrounding this discussion would indicate that it is not meaningless.
- maerF0x0 11y ago
  That can be a signal that investor sentiment is that Apple's revenue is less likely to continue/grow vs Alphabet's is likely to be stable/growing.
- hyperbovine 11y ago
  How much Google product did you buy last quarter...
  - rch 11y ago
    The most interesting part about signing up to Google Contributor has been the allocation reports. Try it just once on a 'top 10 list of celeb whatever' site to see how much they make per visitor.
    - JorgeGT 11y ago
      According to the sample prices of $2-$10 for 5-50% fewer ads, I guess the monthly average for each user is $13-$40?
  - dragonwriter 11y ago
    More than the $0 I did of Apple product. Google Express, Google Play Music (and/or Youtube Red, depending on how you look at it), a Chromecast. And a (branded, not AOSP) Android phone, which I think Google ultimately sees something for, though I'm not sure.
josm 11y ago
Well I'm not exactly suprised.
pluma 11y ago
EDIT: Go fuck yourself, HN.
- HappyTypist 11y ago
  Nominal stock prices are irrelevant. You can have 100 shares at $1 each or 10 shares at $10 each. Same thing. Companies sometimes split there shares (i.e. Redenominate their units) just so it's easier to buy for individual investors. What we are talking about is market capitalisation, I. E. Total share count x per share price.
- millstone 11y ago
  Prices alone are not comparable across companies. But if you multiply by the number of shares, you get a sort of measure of what it would cost to buy the entire company. This is called the market capitalization.
- putlake 11y ago
  It's clear you have no understanding of markets. Price per share is meaningless. What is being compared is the market cap (Price per share * Number of shares outstanding). In other words, the total value of the company.
  - deleted 11y ago
    [deleted]
  - dang 11y ago
    > It's clear you have no understanding of markets. There was no call for that. We ban accounts when people attack others personally, so please don't do this again.
    - putlake 11y ago
      Well he wrote in his comment that he has no understanding of markets. I'm agreeing with what he wrote about himself -- verbatim.
newman314 11y ago
People were losing their minds over the fact that iPhone shipments slightly declined. If you look at the year over year growth (excluding the massive bump for iPhone 6), it would show that AAPL is still ahead of the growth curve. See https://imgur.com/vO0kPEy https://imgur.com/vO0kPEy * Apple's quarterly revenue: $75.9bil * Apple's quarterly profit: $18.4bil * Google's quarterly revenue: $21.3bil * Google's quarterly profit: $6.8bil In sheer numbers, Apple's total profit is quite a bit more than Google's so there's that.
- deleted 11y ago
  [deleted]
- VonGuard 11y ago
  Very true, but Apple has been the darling for a long time, and Wall Street has be desperate to find any flaw in their plans. Apple is a big part of a lot of people's 401k and other investments, so paranoia prevails. Alphabet is only just now entering its Apple-like growth phase, however. It would seem that it could only go up, whereas at some point, Apple will saturate the market and have to start going down. Seem, mind you. This has nothing to do with reality, only with investor psychology.
- bduerst 11y ago
  * Apple's quarterly profit margin: 24.2% * Google's quarterly profit margin: 31.9%
- bdcravens 11y ago
  AAPL isn't as hot as it's been in the past, and that's ok. No company stays at the top forever. As your numbers show, Google has a higher profit margin.
- npalli 11y ago
  70% of the revenue and (maybe) 80% of the profit of Apple comes from a single product - the iPhone. Apple themselves have given lower guidance going forward. There is a limit to the number of people buying iPhone at huge margins every year. The total units might continue to grow but not at the current margins and not as frequently. Hard to be bullish unless some other product takes off.
aresant 11y ago
"SEO isn't good for users or the Internet at large. ... It's a bug that you could rank highly in Google without buying ads, and Google is trying to fix the bug." (1) That statement is more-or-less the reality of every google-dependent business in the world at this point - Google is getting better and better at charging advertisers for their product - everybody is going to wind up paying the Google tax and this Quarter's results are evidence that GOOG is moving in the "right" direction to that end. (1) http://www.seobook.com/virtual-real-estate-virtually-disappears http://www.seobook.com/virtual-real-estate-virtually-disappe...
whack 11y ago
Kudos to Google. I'm happy for them. But it's also worth pointing out that Market Cap is a horrendous way to measure how "valuable" or "powerful" a company is. Companies A and B both want to raise $10B to fund a new investment opportunity. A decides to issue corporate bonds, because it doesn't want to dilute its shareholders. B decides to issue new equity instead, because they feel that their company stock is actually overvalued at the moment. Net result: A's market cap remains the same. B's market cap increased by $10B. No difference in future projected earnings/revenue between the 2 of them, but B now leads A in market cap. Another scenario: Companies A and B both made $20B in profits over the past year. Company A decides to keep $5B in the bank, and returns the remaining $15B to their shareholders. Company B hoards all $20B, and doesn't do anything with it besides letting it sit in the bank. Company A's market cap drops by $15B because of their decision to issue dividends, and company B's market cap now leads A, just because they decided to sit on their pile of money. If you want to judge how powerful a company is, look at its revenue, profits or total assets. If you want to judge how successful a company is, look at its investor returns. Market cap isn't really all that meaningful a metric to judge a company by.
- jedberg 11y ago
  In both cases you describe, the company with the higher cap is the more "powerful" company though. In example one, they have a lot more control of their destiny since they have debt and not more shareholders. In number two they have more control because if an opportunity comes up that costs say 10 billion, Company B can act on that and Company A cannot.
  - whack 11y ago
    > In number two they have more control because if an opportunity comes up that costs say 10 billion, Company B can act on that and Company A cannot. You missed the example completely. Both companies raised $10B, either through debt or equity, and both of them spent/invested the money immediately. Net result: both of them have equal amounts of cash in the bank. But one of them has a market cap $10B higher than the other. Simply because of a tactical choice they made in financing. There are minor advantages/disadvantages involved in debt vs equity financing. However, these differences are all 2nd order effects. At a macro level, they have remarkably similar financial outcomes. Read up on Modigliani-Miller Theorem if you don't get this concept.
aqzman 11y ago
Very impressive. I remember being a young teenager when Google first went public, and around the same time my parents were looking at investing a moderate amount of money (around 10K, if I remember correctly) in the stock market. I suggested they buy stocks in Google, they didn't take my advice, which I don't blame them for as taking investment advice from a 14 year old typically doesn't end well. It will be very interesting to see where Alphabet/Google go in the next 10 years.
- jcsnv 11y ago
  I remember being in a situation similar to that! Google's $100 IPO price looks like a steal now.
  - tim333 11y ago
    The IPO price was $42.50 per share split adjusted. Which I brilliantly passed on. I mean how could some search software be worth that much?
SilasX 11y ago
Out of curiosity, is there a reason Google/Alphabet shouldn't be on the Dow?
- bdcravens 11y ago
  No, but who would it replace? Apple was only added last year, and there isn't that much turnover on it. There currently are no pure online companies on there, and despite the role of tech in today's world, only a few companies in the space (MSFT, Cisco, Apple, IBM)
- minimax 11y ago
  Yes. It's because of the idiotic way the Dow formula works. The Dow is a price weighted index. To compute the value of the Dow, you sum the per-share prices of the constituents and divide by a magic divisor. So a $50 move in GOOG (~6.6% change) and a $50 move in AAPL (50% change) would have the exact same impact on the value of the index. The kludgey solution to this problem is just to not incorporate high priced stocks into the index. Incidentally this is why when you hear anyone quoting the Dow you can tell immediately that they are either clueless or an innumerate moron.
  - hodwik 11y ago
    The lower the price the easier to buy, so there should probably be some weighting on stock-price to remove some weekend warriors from the equation on many-shared stocks, and to reflect the barriers to entry on stocks like BRK.A.
- nostrademons 11y ago
  The Dow is useless as a stock index. It's composed of only 30 stocks, so a big move in one of them (like when Caterpillar announced a restructuring charge and its stock tanked by 20%) will be reflected in the index even if it has nothing to do with the broader market. Also, the index tends to skew toward older blue-chips (hence the name "Dow Jones Industrial Average), so it doesn't reflect a lot of what's actually going on in the market. There's not a single Internet stock on it, for example: the "technology" sector is represented by Apple, IBM, Cisco, Intel, and Microsoft, and Amazon/Google/Facebook/even Ebay & Yahoo are conspicuously absent. Anybody with any sort of financial literacy uses the S&P 500 as the proxy for the U.S. stock market. Even that has its problems, but it's a lot closer to meaningful than the Dow is.
droopybuns 11y ago
I feel like there are a fair number of reluctant capitalists employed by this company. I wonder how long they can post these kinds of numbers before something breaks.
stephengoodwin 11y ago
Apple also started paying quarterly dividends in 2012[1]. Whereas, Google does not pay out dividends[2]. Apple's annualized dividend yield is 2.2% (for comparison, Microsoft's is 2.6%[3]). [1] http://www.streetinsider.com/dividend_history.php?q=AAPL http://www.streetinsider.com/dividend_history.php?q=AAPL [2] http://www.streetinsider.com/dividend_history.php?q=GOOG http://www.streetinsider.com/dividend_history.php?q=GOOG [3] http://www.streetinsider.com/dividend_history.php?q=MSFT http://www.streetinsider.com/dividend_history.php?q=MSFT
rjvir 11y ago
According to Google Finance, it appears that Alphabet has a market capitalization of $517B, which is far different than the $558B quoted in the article. This does not appear to be a temporary fluctuation. https://www.google.com/finance?q=NASDAQ%3AGOOGL https://www.google.com/finance?q=NASDAQ%3AGOOGL Am I missing something? Based on the current market cap numbers on Google Finance, Apple is still higher than Alphabet.
- tosseraccount 11y ago
  Need to combine Google/Alphabet share classes.
  - dragonwriter 11y ago
    No, the reported market cap on Finance already does that; the after-hours trading explanation seems the better explanation.
    - tosseraccount 11y ago
      "Alphabet shares (GOOGL) jumped 6% after Google's parent reported estimate-topping fourth-quarter results after the bell. Its combined share classes were then worth $554 billion, surpassing Apple (AAPL), which had a value of about $534 billion and whose shares were down slightly after hours." http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-google-apple-market-cap/79652616/ http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-... Please note:https://www.google.com/finance?q=NASDAQ%3AGOOGL https://www.google.com/finance?q=NASDAQ%3AGOOGL and https://www.google.com/finance?q=NASDAQ%3AGOOG https://www.google.com/finance?q=NASDAQ%3AGOOG
      - dragonwriter 11y ago
        Yes, and if you look at the market cap on both of GOOG and GOOGL on Google Finance, you'll note that they are the same (after close -- during trading they seem to be very close but slightly different, probably for timing reasons) and if you do the math, you'll see that for each they aren't reporting the individual cap but the combined cap. My first reaction was that the problem was one or the other share class being excluded, and then I checked exactly the sources you cite and checked the numbers and realized that couldn't be the problem if.you used Google Finance reported market caps, because they don't report it that way.
wangii 11y ago
Microsoft reached an intraday high share price of $119.94 in December 1999. With 5,160,024,593 outstanding shares, it had a market capitalization of $618.9 billion. then what? what next?
- adventured 11y ago
  The glaring difference of course being that Microsoft was trading for roughly 88 times trailing earnings. Google is trading for close to 30 times earnings with this latest quarter. Google's valuation is obviously sustainable, Microsoft's was not at that time. What's next? Google is likely to become even more valuable as they have a lot of growth left and investors clearly like to give them a nice multiple.
rijusaini 11y ago
"If Google disappeared the world would screech to a halt". Yes it would, for me. Someone please unshackle me.
spectrum1234 11y ago
Wow these points really show Hacker News is bad at finance :)
iamgopal 11y ago
The elephant in the room nobody seems to notice is, they have so much data that they can actually look ahead of curve for any industry or tech, and so can have very good tactical advantage, and being open to jump in to any tech, they can steer much easily then the counterparts.
donohoe 11y ago
That is AMAZING for a company barely a year old. Kudos to all involved.
bane 11y ago
As an American I think it's pretty badass that something like 8 or 9 of the top 10 most valuable companies in the world are all American. I'm not sure if that means we're doing something right, but it's still pretty cool for a moment.
- cvburgess 11y ago
  As an American I find it actually very disappointing. We have the wealthiest, most powerful companies, and a government that threatens to shutdown every year. Many citizens can't afford healthcare and basic necessities, and yet we have companies with billions of dollars tucked away over seas.
- arikrak 11y ago
  All 10 of the 10 most valuable publicly traded companies are American (multinational) companies. #11 is Chinese and #20 is Swiss [1]. (Not that the largest 4 companies are tech companies, so that explains part of it...) [1] http://www.dogsofthedow.com/largest-companies-by-market-cap.htm http://www.dogsofthedow.com/largest-companies-by-market-cap....
  - Hermel 11y ago
    This list is incomplete. Nestlé for example is missing (https://www.google.com/finance?q=VTX%3ANESN https://www.google.com/finance?q=VTX%3ANESN).
    - arikrak 11y ago
      Thanks, you can view a complete list on Google finance if you sort by market cap.[1] The top 10 are still US companies though. [1] https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stockscreener https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stock...
  - tim333 11y ago
    America does companies well. If you're going to base a global corporation somewhere it's not a bad choice.
dschiptsov 11y ago
Valuation based entirely on hype and big names, without any released products or services?
- jaxondu 11y ago
  Precisely why the restructure Google into Alphabet. Market looks for potential earning. And the various moonshot projects is the marketing way of telling the market we're the future. R&D in the open is paying off in this sense for Alphabet/Google. And the market do not see those great potential products brewing in the labs of Apple, Microsoft, IBM etc.
Mkansagra 11y ago
Let's be realistic for once. There is no such thing as complete AI. AI means a piece of software that does whatever you tell it to do, acting like a human. Simply Artificial = Human made Intelligence = Brain power or thinking power.
- pnut 11y ago
  That may be technically true today, but it feels a little like parents taking credit for their child's accomplishments. That distinction means less and less as time goes on, anyway. After learning from a billion human lifetimes, and being coded by 100,000 humans' combined efforts, would it be such a surprise that something greater eventually emerges?
- mcv 11y ago
  > AI means a piece of software that does whatever you tell it to do But it can figure out by itself how to do it.
Mkansagra 11y ago
Let's be realistic for once. There is no such thing as complete AI. AI means a piece of software that does whatever you tell it to do, acting like a human. Simply Artificial = Human made Intelligence = Brain power or thinking power.
mark-r 11y ago
Am I the only one who didn't realize Alphabet == Google? When did that happen?
- pavanky 11y ago
  A few months ago. They re-organized the structure so that Alphabet became the parent company and Google became the subsidiary. Larry Page heads Alphabet while Sunder Pichai heads Google. Some of the companies purchased by "Google" became subsidiaries of Alphabet as well.
csomar 11y ago
So let's see, according to Google Finance. Not quite accurate number, only a few billions more or less. Apple Marketcap: $539B Google Marketcap: $537B Microsoft Marketcap: $435B Facebook Marketcap: $320B Total of these big 4: $1.8 Trillion Who said the bubble is going to burst this year?
- yannickmahe 11y ago
  What are the P/E ratios of all these ?
osoti 11y ago
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720 points by pearlsteinj 11y ago

The comparisons between Google and Apple aren't as apples-to-apples as everyone in the media seems to think. If we're talking about the future of these companies, and their earning power, they are situating themselves very differently. Apple is really a consumer electronics company, Google is an artificial intelligence company. And investors think more money will be in the future of AI instead of consumer hardware and software, so even though Google's earnings are smaller than Apple's, the future earning power is so much more. If Apple starts going faster on AI then I think it will be very interesting between these two companies.

jonesb6 11y ago
I absolutely agree that comparing Google and apple is silly. But calling Google an "artificial intelligence" company is just feeding another buzzword into the fire.
- jonknee 11y ago
  Why? It's obvious that is where they are going.
  - rsp1984 11y ago
    Where they are going yes but not what they are today.
    - Mangalor 11y ago
      AI is basically learning technology, and they already employ AI in search ranking.
    - jonknee 11y ago
      Wall Street values you based on future expectations and Google is being valued in part for its perceived lead in AI and the growth that will bring. Their main product (search) uses plenty of AI so it's not a stretch whatsoever.
  - mwfunk 11y ago
    Calling someone an "X company" means that they make their money from X. There are aspects of AI in targeted advertising, but not enough to call them an AI company rather than an advertising company. It doesn't really matter where they're going- that's what they aspire to be, not what they are. If you judge companies based on their aspirations, you end up judging them based on their most positive and idealistic version of themselves, rather than what they are, which is much more meaningful. A much more cynical way to look at it is, judging a company based on its aspirations means judging them based on their marketing rather than their products, services, or actions. Think of how differently Comcast would be perceived if everyone wanted to talk about the company Comcast wishes it was, rather than company that it is. Or any company you don't like for whatever reason.
    - lazaroclapp 11y ago
      How about "Alphabet/Google is trying to position itself as an AI company" instead of "is an AI company". That direction is still important to explain why it is valued like it is: investors are betting that it has good chances of succeeding in becoming an AI company.
    - skybrian 11y ago
      The stock price of a company is based on predicting future earnings, so talking about the future of a company is pretty much unavoidable in this sort of discussion. You can ignore what management says and predict the future in some other way if you prefer, but ignoring the future entirely isn't possible. (Assuming that nothing will change is also a prediction.)
    - dragonwriter 11y ago
      > Calling someone an "X company" means that they make their money from X. Sure, but even so (except for the way some people treat Google), we typically call companies that make their money by placing ads in a service or media offering an "X company" where X describes the service or media offering, not "advertising". From that perspective, Google is an online services company, with AI playing an important role in some of its services.
  - jfuhrman 11y ago
    How much of Google's profit(or even revenue) is not from tracking user data and advertising? Search, Gmail, Android, Chromebooks, Nexus, Pixel, Youtube, Maps etc. everything is about selling advertisements after scanning user provided data. The rest are either loss leaders or moats, or ones with unclear monetization scenarios like Fiber. One exception is GCE and GAE, but I don't know how much profit/revenue they're making. I would count Google Apps, but until recently they were scanning even paid Google Apps for Business accounts for ad tracking purposes.
    - stvswn 11y ago
      Your question is answered explicitly in the press release, if you wanted to Google it. But are you instead making a point about how that's bad or something? The business model is to give away services for free and then show ads to monetize, that's no secret. Do you contend this is a poor business model, or somehow immoral or something?
      - jfuhrman 11y ago
        If you follow the thread, it's about calling Google an AI company.
    - jonknee 11y ago
      They use AI to sell advertising and services (be it search relevancy, contextual awareness, filter out spam, etc)... The reason why it's not incorrect to call Google an AI company is that Wall Street thinks they'll be able to shake out ever more cash from their machines in the future because of their position in ML and AI. It's their competitive edge and one that becomes more and more valuable as software continues to eat the world.
    - krakensden 11y ago
      Eric Schmidt has been claiming that fiber is making good money. Which doesn't seem impossible.
- shimon 11y ago
  Google's flagship product is a box that you can type words into, and get relevant texts/references/facts in response. It seems like a textbook example of AI.
  - rimantas 11y ago
    AI with quickly advancing dementia.
  - drewrv 11y ago
    AI is whatever hasn't been done yet https://en.wikipedia.org/wiki/AI_effect#AI_is_whatever_hasn.27t_been_done_yet https://en.wikipedia.org/wiki/AI_effect#AI_is_whatever_hasn....
    - taneq 11y ago
      Precisely. The image recognition and natural language processing that's "just a deep learning algorithm" today would have blown the socks off anyone ten years ago. Chess playing programs were AI until they could decisively beat all humans, and then we decided that chess doesn't require intelligence. Self-driving cars were AI until they got close to market and now apparently driving a car doesn't require intelligence. It would seem that only True Scotsmen are intelligent.
      - dhimes 11y ago
        Don't forget that Facebook is going to be a big player in this game as well- especially facial recognition, where everybody is helping them by tagging people in their photos.
        tajen 11y ago
        If we characterize companies as strongly as "Apple, a consumer product company" and "Google an AI company", then Facebook is a worldwide identity tracking agency. They could pivot and be in charge of delivering birth certificates, DNA groups, ethnicity mapping, insurance-bank-police profiling... In fact I expect it to play a very major role in wars to determine targets.
- abraham6464 11y ago
  “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?” “Oh, we’re really making an AI.” -Larry Page [0] [0] http://www.wired.com/2014/10/future-of-artificial-intelligence/ http://www.wired.com/2014/10/future-of-artificial-intelligen...
- deciplex 11y ago
  They mostly use the AI to try to convince you to buy shit. It may be an uninspired use of artificial intelligence, but it's still artificial intelligence.
- osoti 11y ago
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- turingbook 11y ago
  Actually, Larry Page himself thought from very early beginning that Google is an AI company: AROUND 2002 I attended a small party for Google—before its IPO, when it only focused on search. I struck up a conversation with Larry Page, Google’s brilliant cofounder, who became the company’s CEO in 2011. “Larry, I still don’t get it. There are so many search companies. Web search, for free? Where does that get you?”… But Page’s reply has always stuck with me: “Oh, we’re really making an AI.” http://www.wired.com/2014/10/future-of-artificial-intelligence/ http://www.wired.com/2014/10/future-of-artificial-intelligen...
whitegrape 11y ago
Nerds have known for years that Google is really an AI company, but do investors really see things that way yet? The stock didn't go up with the announcement of AlphaGo, though that could just be because they think that particular AI work won't give Google any competitive advantage in future revenue...
- azinman2 11y ago
  It's been a machine learning company. We'll see what the shift to AI looks like, but those are two very different things.
Steko 11y ago
> investors think more money will be in the future of AI instead of consumer hardware and software No, first you are mistaking a bet on a single company for a bet on an industry. The obvious counterexamples being that there are no shortage of wannabe AI companies valued orders of magnitude lower than Apple, that doesn't mean wall street thinks devices beat ai as an industry gold mine. Google is valued highly today because they print money today. They print money because of search and advertising. They are really good at this and that's why their market cap exceed's Apple's today. These prices are not remotely rational. There's no serious investor that thinks Apple is going to shut the lights off inside 7 years which is what the current 'market cap' would tell you.
- bradshaw1965 11y ago
  ... Google is valued highly today because they print money today. They print money because of search and advertising. They are really good at this and that's why their market cap exceed's Apple's today. ... That would be correct if they were value companies throwing off discounted cash flow but both Google and Apple are priced as growth companies. The market believes Apple has peaked in growth and that Google has a bit more potential. It's not clear why exactly from the earnings report of the holding company. Revenue for Google is 99% ad sales so it's not clear exactly where that bottom line revenue is going to come from. All revenue from the rest of the holding company was less then $500 million.
  - CydeWeys 11y ago
    > That would be correct if they were value companies throwing off discounted cash flow but both Google and Apple are priced as growth companies. AAPL's P/E ratio as I write this is 10.26. I would strongly make the argument that Apple is thus NOT priced as a growth company.
    - simonh 11y ago
      Which shows you how much the market knows. Apple's PE ratio was 11 back in 2009. In fact the first years of the iPhone corresponded with a precipitous plunge in their PE ratio as their revenues rose rapidly, but their share price was dragged kicking and screaming along behind them.
jdoliner 11y ago
I feel like this comparison of the two started during the handset wars. If you'll recall they were very chummy companies before that with Eric Schmidt sitting on both boards. With the handset wars cooling down a bit I think the comparisons are becoming a lot less apt.
bradshaw1965 11y ago
Both companies will struggle for the kind of revenue growth Wall Street is looking for. Ad sales account for 99% of Google revenue, with speculative ventures generating less then $500 million. It's all about finding products and services that people are willing to part with cash.
- imaginenore 11y ago
  Self-driving cars market can probably double Google's value when it takes off.
tn13 11y ago
I agree that they aren't same but I doubt if Apple is even in the same league as Google when it comes to AI. Apple is a product company that makes iOS+Hardware for profit and also seeks rent to access this platform. Google is synonymous with search/advertising which is fancy word for media. For google that media comes first and platform monopoly comes second. That is why Google continues to offer all its services on iOS despite virtually owning Android. For every product that Apple builds in future its success will be like a toss of a coin (of course biased). Google succeeds no matter which platform succeeds.
peter303 11y ago
AI had big VC run in the 1980s. At that time it focused on expert stems and logic computing. Now the emphasis is on big data and deep learning neural nets. Google can afford to nuture a technology for a decade while VCs wont.
petke 11y ago
Also apple only spends about 3% of revenue on R&D. Google spends about 15% (and so does ms) if i remember correctly. I think at some point this is going to show. If apple isn't careful they might end up making the pretty but dumb phones of tomorrow.
- aroman 11y ago
  If you consider the fact that Apple's revenue is almost four times that of Google's, the actual difference in spending is not very substantial. Presumably there's some point of diminishing returns on R&D for one company in the billions of dollars range...
  - simonh 11y ago
    Indeed. Apple has been ramping up R&D spending by about 40% per year for many years, which is a phenomenal ramp up, it's just that its revenues have grown even more dramatically.
Dolores12 11y ago
Apple is an Iphone company, not consumer electronic one.
partiallypro 11y ago
Both are at "peak margin," but Google's margins will fall slower than Apple's. Hardware margins are notoriously hard to maintain, Apple is the outlier, and it can't last forever.
apsec112 11y ago
"Google is an artificial intelligence company." Google has great AI people - arguably more than anywhere else - but the bulk of the company is not based on AI. I'm a former Google employee, and up until a few years ago, most of the company was very skeptical of machine learning. Many people still are. I left because my machine learning project was canceled - a manager had an older solution that didn't use machine learning, and he didn't want his pet project to be replaced (even though it had worse performance and was much harder to use), so we were canceled while about fifty lines of code away from launching. Other parts of the company may be different, but in our product area AI was a minus, not a plus.
HeavyStorm 11y ago
Google is not an AI company. Google is a "knowledge" company. (Most of AI-like stuff from Google is actually a software that extracts relevant knowledge from a big database.) Google makes money from that crazy amount of information they have available, albeit we must admit that thus far, they haven't been able to turn a real business from most of it: the real profitable way they use that knowledge is to serve us ads.
HSO 11y ago
No need to make it about Apple vs Google or some newspaper narrative. In a world with negative short rates, money essentially becomes a "bad" (or negative good). Ceteris paribus, companies who deliver a lot of it today or in the immediate future will be valued less than those with cash flows farther out. I still think the market is making a mistake here, in that the real difference between Google's and Apple's investment projects is not in their nature ("moonshot" vs "mundane") but in their PR. Google just talks more about them. Given that investors think that Google's stream of cash flows is weighted towards the future and Apple's to the present, though, it makes sense that in the current rate environment valuations are as they are. See also Facebook, Amazon, or Netflix. No need for grand narratives about the relative merits, product and management philosophies, or management personalities. That said, I disagree with the market and am betting this is a bubble that will pop soon.
6stringmerc 11y ago
>Google is an artificial intelligence company. That's an interesting take, because for many years I'm pretty sure the largest portion of their income was from advertising revenue. That makes them an ad firm. Yeah they've diversified, but let's be honest, they're in sales straight up first and foremost.

percentcer 11y ago

It's interesting to that it took this long, just considering the utility of each company. If Apple disappeared tomorrow I'd be moderately inconvenienced, I'd have to pick up an Android handset instead of my iPhone and maybe set up some new podcast feeds. If Google disappeared the world would screech to a halt.

jad 11y ago
How's that? To search the web, I'd go to DuckDuckGo or Bing or whatever. Other companies also provide web mail, maps, office document solutions, etc. Google's definitely better at those things, but using a worse version of those products would not cause the world to "screech to a halt." Probably the most disruptive thing if Apple vanished would actually be every tech company suddenly needing to figure out how to use Windows or desktop Linux.
- sdrothrock 11y ago
  We could probably think of alternatives for most of these things, but there are a lot of people who just use what came with their phone/browser. Additionally, think of all of the Google-backed services out there provided by other companies. How many companies use gmail heavily that would lose all kinds of records? Normal people would lose their e-mail too, and businessmen would lose a lot of their calendars. The actual solution doesn't matter as much as the data already invested in Google's solutions that would be lost if Google just vanished.
  - tedmiston 11y ago
    And Google Takeout continues to ensure that won't happen.
    - Thirdegree 11y ago
      Only for people that proactively use it. Speaking of which, I should probably backup again.
  - 11y ago

0xCMP 11y ago

You're all talking about Google being more valuable as if Apple did not lose a ton of value since Jan 1 in the scares. Majority of the loss has been in generalized fear. Google hasn't really done anything to grow past them. They just stayed where they were and Apple fell below them. Lets please keep this in mind when we throw around ideas like one is better than the other as a result of this.

modelmodel 11y ago
What were the scares caused by?
- 0xCMP 11y ago
  First off, never claiming to understand the whole stock market or being an expert. I'm am amateur trying to make sense of this. But here is what I know very tersely (at work, can't write a paper here.) China is highly leveraged and their stock market was crashing. Their very high spending is often accepted because of their continuing growth which people have been assuming was a lie for the past 7(?) years. They always say it's 7% growth. With a stock market crash people think that maybe people are waking up that the growth isn't there and China won't be able to sustain much longer. Thats not good for apparently many far reaching reasons. Oil is crashing for many reasons which you could speculate about but not know for sure. The reality for the US markets is that many smaller oil companies are highly leveraged because oil was so expensive and they were funded with the idea it'd stay above something like $50/barrel. Their methods are more expensive than say Saudi Arabia's methods which allow them to sell much cheaper (although they need revenue which they're offsetting by selling bonds). Here is where I'm lost a bit, but somehow this is tied to the banks again who might be in trouble if they all start failing. Not to mention people have been calling a correction for almost a year now based on debt levels, global banking issues, global economic issues, high P/E ratios, etc. to happen sometime around now till next year. The stock market fear indicators on money.cnn.com[0] were at extreme levels for several days in Jan. Plenty of issues with fear and emotions in the markets right now. Some of which are well placed fears. Apple was going down a lot during those periods of fear well before their earning call which is what has been sealing the deal. I think during that major sell off people thought it was the "top" and were getting out. [0]: http://money.cnn.com/data/fear-and-greed/ http://money.cnn.com/data/fear-and-greed/

pbreit 11y ago

Both tremendous companies. I actually wish Apple would deploy some of its know-how and capabilities a little more broadly. Not everything has to be an immediate $20 billion opportunity.

draw_down 11y ago
On the other hand, that product stance helps them avoid Google Reader-type situations.
- lern_too_spel 11y ago
  Right, it gets them into more iTunes Ping situations.
  - draw_down 11y ago
    They certainly have failures, that's one of them. But nobody was sad when it got killed, you know? Nobody misses iTunes Ping or iAds or MobileMe.
    - sangnoir 11y ago
      > But nobody was sad when it got killed, you know Oh my, isn't that damning with faint praise? It's an indictment against Apple: Ping was so bad no one missed it.
      - oldmanjay 11y ago
        Well, it's an indictment against Ping anyway. It would be mighty disingenuous to somehow suggest that level of failure is a statement of the possibility of future success for them considering how big their hits are.
        sangnoir 11y ago
        It's only disingenuous if you're stripping away the context of the thread, further upstream, ancestor comment said: >>>On the other hand, that product stance helps [Apple] avoid Google Reader-type situations. and GP replied: >>Right, it gets them into more iTunes Ping situations. followed by: >But nobody was sad when it got killed, you know? Nobody misses iTunes Ping or iAds or MobileMe Which is damning Apple with faint praise. >It would be mighty disingenuous to somehow suggest that level of failure is a statement of the possibility of future success for them considering how big their hits are That's a non-sequitur. No where in my comment did I extrapolate or attept to divine Apple's future failure/success.

BorisMelnik 11y ago

interesting adjective "most valuable." To many that equates to revenue generated, to others profitability. Haven't read this article but starred for later I'm curious to see what it says.

glibgil 11y ago
You might just star this thread for later commenting too
- gist 11y ago
  The core, at least to me, of his comment was: "To many that equates to revenue generated, to others profitability" He happened to add that he would read the article which is why I am guessing as of when I viewed the comment it was heavily downvoted. The heavy handed downvoting is what I don't like about HN so quick to jump and assume there is no value in the comment. There was. Although I know the definition for sure there are "many" people who would read "most valuable" and not know the true definition. [1] [1] My point being there is value in the observation of people who aren't clued in to that fact.
kirian 11y ago
It's talking about Market Cap.
- ghayes 11y ago
  Yes, which is basically how much someone would pay to own the company today = discounted expected long-term profits.
  - kidfire 11y ago
    Not at all true. Most obvious reason being control premium (which applies to all buyers, but lot of other reasons why price paid by a buyer would be different, for example expected synergies) Really just share price x shares outstanding - by one valuation method, share price in theory is driven by expected present value of future dividend stream, but even this is also very different from what you said (company's actual cash flow)

tyingq 11y ago

Paid clicks up 31% overall, on Google’s own sites, up 40%. That's a bit concerning to me, especially when you consider: a) That growth is outpacing internet traffic growth, and has for many years now. Internet traffic CAGR is 23%[1] b) The shift from desktop to mobile should have the effect of reducing clicks. c) Since some of the growth is video, I would expect a decrease in click growth related to this as well. Video adds to bandwidth growth pretty directly. Click growth would be less direct. Sergey and Larry, at least at one time, might have expressed concern: "The goals of the advertising business model do not always correspond to providing quality search to users"[2] [1] http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.html http://www.cisco.com/c/en/us/solutions/collateral/service-pr... [2] http://infolab.stanford.edu/~backrub/google.html http://infolab.stanford.edu/~backrub/google.html

Jabbles 11y ago
Why is any of that concerning? I'm not seeing the link.
- malchow 11y ago
  I think he is suggesting that it is possible to drive growth in paid clicks by misdirecting organic click intenders to paid clicks. Of course, one imagines there are many other explanations for growth, too.
- tyingq 11y ago
  Sergey/Larry explain it better than I would. http://infolab.stanford.edu/~backrub/google.html http://infolab.stanford.edu/~backrub/google.html Scroll down to "Appendix A: Advertising and Mixed Motives"
  - Jabbles 11y ago
    What does that have to do with this news though?
    - 11y ago

xyzzy4 11y ago

Good time to short Alphabet? I haven't looked yet but I bet their P/E ratio is bubble-ish.

kbenzle 11y ago
Yeh, at a PE of 36 I like what your saying, but still not close an the Amazonian 850+ PE!
- xyzzy4 11y ago
  I think Amazon's revenue could grow another 10X though.
  - deleted 11y ago
    [deleted]
  - fixermark 11y ago
    ... which would put them at 85+ PE? That's still a lot of PE, isn't it?
  - gefh 11y ago
    Taking it to a P/E of _only_ ~100...
Mikeb85 11y ago
Maybe, maybe not. I doubt there's much upside, but generally mega caps don't have much volatility either...
- xyzzy4 11y ago
  I wouldn't count on that. Apple seems to have a lot of volatility lately.
  - Mikeb85 11y ago
    Compared to what?

jfuhrman 11y ago

Well, abusing their search dominance among other things like making ads indistinguishable from organic results and paid placement on verticals like shopping/hotels etc. was eventually going to pay out. More details on how Google manipulated search rankings manually to make more money: From http://www.wsj.com/articles/how-google-skewed-search-results-1426793553 http://www.wsj.com/articles/how-google-skewed-search-results... >A previously undisclosed report by staffers at the Federal Trade Commission reveals new details about how Google Inc. manipulated search results to favor its own services over rivals’, even when they weren’t most relevant for users. >In a lengthy investigation, staffers in the FTC’s bureau of competition found evidence that Google boosted its own services for shopping, travel and local businesses by altering its ranking criteria and “scraping” content from other sites. It also deliberately demoted rivals. >For example, the FTC staff noted that Google presented results from its flight-search tool ahead of other travel sites, even though Google offered fewer flight options. Google’s shopping results were ranked above rival comparison-shopping engines, even though users didn’t click on them at the same rate, the staff found. Many of the ways Google boosted its own results have not been previously disclosed. >One way Google favored its own results was to change its ranking criteria. Google typically ranks sites based on measures like the number of links that point to a site, or how often users click on the site in search results. >But Marissa Mayer, who was then a Google vice president, said Google didn’t use click-through rates to determine the ranking for its own specialized-search sites, because they would rank too low, according to the staff report >Instead, Google would “automatically boost” its own sites for certain specialized searches that otherwise would favor rivals, the FTC found. If a comparison-shopping site was supposed to rank highly, Google Product Search was placed above it. When Yelp was deemed relevant to a user’s search query, Google Local would pop up on top of the results page, the staff wrote. >Other regulators have found similar practices. European antitrust authorities in 2013 said Google had a different, “specialized” search algorithm for ranking its own content. >To bolster its own listings, Google sometimes copied, or “scraped,” information from rival sites. According to the FTC report, Google copied Amazon’s rankings of how well products were selling, then used that information to rank its results for product searches. Amazon declined to comment. >While Google promoted its own results, it sometimes demoted rivals, the FTC staff found. For example, Google compiled a list of comparison-shopping sites and “demoted them from the top 10 web results,” staff wrote. According to the report, Google users in tests didn’t like the changes; only after Google tweaked its search algorithm at least four times, and changed the ranking criteria, did the new results get “slightly positive” feedback, the staff said. >Google’s efforts paid off, the FTC found. It said Google’s maneuvers reduced Web traffic to rivals, and increased traffic to Google sites.

pearlsteinj 11y ago

Also interesting to see in this earnings report is that Google's "other bets" aka moonshots are 3.5 billion in the red...[0] [0]https://abc.xyz/investor/news/earnings/2015/Q4_google_earnings/index.html https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...

toomuchtodo 11y ago
I'd expect years, if not a decade for those to make money. I'm fond of how Google's voting structure is designed to prevent common stockholders from changing the direction of the company (for the same reason Elon Musk won't take SpaceX public until there are ongoing flights to Mars): investors are too concerned with short-term enrichment. If all of your ventures are making money hand over fist, you're not trying anything hard.
- pearlsteinj 11y ago
  I totally agree, this is just the first glimpse we get into the finances of the moonshots.

wodenokoto 11y ago

What was the big jump for Google/alphabet I July?

Lewisham 11y ago
IIRC that was when reported earnings from mobile were higher than Wall Street expected. WS was expecting doom and gloom from mobile for a long time.
ChaseT 11y ago
It was caused by a positive earnings report. http://www.bloomberg.com/news/articles/2015-07-17/google-appreciation-day-as-record-60-billion-is-added-to-stock http://www.bloomberg.com/news/articles/2015-07-17/google-app...

dangoor 11y ago

Interesting that Apple's net profits last quarter was greater than Alphabet's revenue.

metaphorm 11y ago
many explanations for this but really at bottom the answer is that the two businesses are not comparable and this comparison is meaningless.
- ant6n 11y ago
  The length of the discussion surrounding this discussion would indicate that it is not meaningless.
maerF0x0 11y ago
That can be a signal that investor sentiment is that Apple's revenue is less likely to continue/grow vs Alphabet's is likely to be stable/growing.
hyperbovine 11y ago
How much Google product did you buy last quarter...
- rch 11y ago
  The most interesting part about signing up to Google Contributor has been the allocation reports. Try it just once on a 'top 10 list of celeb whatever' site to see how much they make per visitor.
  - JorgeGT 11y ago
    According to the sample prices of $2-$10 for 5-50% fewer ads, I guess the monthly average for each user is $13-$40?
- dragonwriter 11y ago
  More than the $0 I did of Apple product. Google Express, Google Play Music (and/or Youtube Red, depending on how you look at it), a Chromecast. And a (branded, not AOSP) Android phone, which I think Google ultimately sees something for, though I'm not sure.

josm 11y ago

Well I'm not exactly suprised.

pluma 11y ago

EDIT: Go fuck yourself, HN.

HappyTypist 11y ago
Nominal stock prices are irrelevant. You can have 100 shares at $1 each or 10 shares at $10 each. Same thing. Companies sometimes split there shares (i.e. Redenominate their units) just so it's easier to buy for individual investors. What we are talking about is market capitalisation, I. E. Total share count x per share price.
millstone 11y ago
Prices alone are not comparable across companies. But if you multiply by the number of shares, you get a sort of measure of what it would cost to buy the entire company. This is called the market capitalization.
putlake 11y ago
It's clear you have no understanding of markets. Price per share is meaningless. What is being compared is the market cap (Price per share * Number of shares outstanding). In other words, the total value of the company.
- deleted 11y ago
  [deleted]
- dang 11y ago
  > It's clear you have no understanding of markets. There was no call for that. We ban accounts when people attack others personally, so please don't do this again.
  - putlake 11y ago
    Well he wrote in his comment that he has no understanding of markets. I'm agreeing with what he wrote about himself -- verbatim.

newman314 11y ago

People were losing their minds over the fact that iPhone shipments slightly declined. If you look at the year over year growth (excluding the massive bump for iPhone 6), it would show that AAPL is still ahead of the growth curve. See https://imgur.com/vO0kPEy https://imgur.com/vO0kPEy * Apple's quarterly revenue: $75.9bil * Apple's quarterly profit: $18.4bil * Google's quarterly revenue: $21.3bil * Google's quarterly profit: $6.8bil In sheer numbers, Apple's total profit is quite a bit more than Google's so there's that.

deleted 11y ago
[deleted]
VonGuard 11y ago
Very true, but Apple has been the darling for a long time, and Wall Street has be desperate to find any flaw in their plans. Apple is a big part of a lot of people's 401k and other investments, so paranoia prevails. Alphabet is only just now entering its Apple-like growth phase, however. It would seem that it could only go up, whereas at some point, Apple will saturate the market and have to start going down. Seem, mind you. This has nothing to do with reality, only with investor psychology.
bduerst 11y ago
* Apple's quarterly profit margin: 24.2% * Google's quarterly profit margin: 31.9%
bdcravens 11y ago
AAPL isn't as hot as it's been in the past, and that's ok. No company stays at the top forever. As your numbers show, Google has a higher profit margin.
npalli 11y ago
70% of the revenue and (maybe) 80% of the profit of Apple comes from a single product - the iPhone. Apple themselves have given lower guidance going forward. There is a limit to the number of people buying iPhone at huge margins every year. The total units might continue to grow but not at the current margins and not as frequently. Hard to be bullish unless some other product takes off.

aresant 11y ago

"SEO isn't good for users or the Internet at large. ... It's a bug that you could rank highly in Google without buying ads, and Google is trying to fix the bug." (1) That statement is more-or-less the reality of every google-dependent business in the world at this point - Google is getting better and better at charging advertisers for their product - everybody is going to wind up paying the Google tax and this Quarter's results are evidence that GOOG is moving in the "right" direction to that end. (1) http://www.seobook.com/virtual-real-estate-virtually-disappears http://www.seobook.com/virtual-real-estate-virtually-disappe...

whack 11y ago

Kudos to Google. I'm happy for them. But it's also worth pointing out that Market Cap is a horrendous way to measure how "valuable" or "powerful" a company is. Companies A and B both want to raise $10B to fund a new investment opportunity. A decides to issue corporate bonds, because it doesn't want to dilute its shareholders. B decides to issue new equity instead, because they feel that their company stock is actually overvalued at the moment. Net result: A's market cap remains the same. B's market cap increased by $10B. No difference in future projected earnings/revenue between the 2 of them, but B now leads A in market cap. Another scenario: Companies A and B both made $20B in profits over the past year. Company A decides to keep $5B in the bank, and returns the remaining $15B to their shareholders. Company B hoards all $20B, and doesn't do anything with it besides letting it sit in the bank. Company A's market cap drops by $15B because of their decision to issue dividends, and company B's market cap now leads A, just because they decided to sit on their pile of money. If you want to judge how powerful a company is, look at its revenue, profits or total assets. If you want to judge how successful a company is, look at its investor returns. Market cap isn't really all that meaningful a metric to judge a company by.

jedberg 11y ago
In both cases you describe, the company with the higher cap is the more "powerful" company though. In example one, they have a lot more control of their destiny since they have debt and not more shareholders. In number two they have more control because if an opportunity comes up that costs say 10 billion, Company B can act on that and Company A cannot.
- whack 11y ago
  > In number two they have more control because if an opportunity comes up that costs say 10 billion, Company B can act on that and Company A cannot. You missed the example completely. Both companies raised $10B, either through debt or equity, and both of them spent/invested the money immediately. Net result: both of them have equal amounts of cash in the bank. But one of them has a market cap $10B higher than the other. Simply because of a tactical choice they made in financing. There are minor advantages/disadvantages involved in debt vs equity financing. However, these differences are all 2nd order effects. At a macro level, they have remarkably similar financial outcomes. Read up on Modigliani-Miller Theorem if you don't get this concept.

aqzman 11y ago

Very impressive. I remember being a young teenager when Google first went public, and around the same time my parents were looking at investing a moderate amount of money (around 10K, if I remember correctly) in the stock market. I suggested they buy stocks in Google, they didn't take my advice, which I don't blame them for as taking investment advice from a 14 year old typically doesn't end well. It will be very interesting to see where Alphabet/Google go in the next 10 years.

jcsnv 11y ago
I remember being in a situation similar to that! Google's $100 IPO price looks like a steal now.
- tim333 11y ago
  The IPO price was $42.50 per share split adjusted. Which I brilliantly passed on. I mean how could some search software be worth that much?

SilasX 11y ago

Out of curiosity, is there a reason Google/Alphabet shouldn't be on the Dow?

bdcravens 11y ago
No, but who would it replace? Apple was only added last year, and there isn't that much turnover on it. There currently are no pure online companies on there, and despite the role of tech in today's world, only a few companies in the space (MSFT, Cisco, Apple, IBM)
minimax 11y ago
Yes. It's because of the idiotic way the Dow formula works. The Dow is a price weighted index. To compute the value of the Dow, you sum the per-share prices of the constituents and divide by a magic divisor. So a $50 move in GOOG (~6.6% change) and a $50 move in AAPL (50% change) would have the exact same impact on the value of the index. The kludgey solution to this problem is just to not incorporate high priced stocks into the index. Incidentally this is why when you hear anyone quoting the Dow you can tell immediately that they are either clueless or an innumerate moron.
- hodwik 11y ago
  The lower the price the easier to buy, so there should probably be some weighting on stock-price to remove some weekend warriors from the equation on many-shared stocks, and to reflect the barriers to entry on stocks like BRK.A.
nostrademons 11y ago
The Dow is useless as a stock index. It's composed of only 30 stocks, so a big move in one of them (like when Caterpillar announced a restructuring charge and its stock tanked by 20%) will be reflected in the index even if it has nothing to do with the broader market. Also, the index tends to skew toward older blue-chips (hence the name "Dow Jones Industrial Average), so it doesn't reflect a lot of what's actually going on in the market. There's not a single Internet stock on it, for example: the "technology" sector is represented by Apple, IBM, Cisco, Intel, and Microsoft, and Amazon/Google/Facebook/even Ebay & Yahoo are conspicuously absent. Anybody with any sort of financial literacy uses the S&P 500 as the proxy for the U.S. stock market. Even that has its problems, but it's a lot closer to meaningful than the Dow is.

droopybuns 11y ago

I feel like there are a fair number of reluctant capitalists employed by this company. I wonder how long they can post these kinds of numbers before something breaks.

stephengoodwin 11y ago

Apple also started paying quarterly dividends in 2012[1]. Whereas, Google does not pay out dividends[2]. Apple's annualized dividend yield is 2.2% (for comparison, Microsoft's is 2.6%[3]). [1] http://www.streetinsider.com/dividend_history.php?q=AAPL http://www.streetinsider.com/dividend_history.php?q=AAPL [2] http://www.streetinsider.com/dividend_history.php?q=GOOG http://www.streetinsider.com/dividend_history.php?q=GOOG [3] http://www.streetinsider.com/dividend_history.php?q=MSFT http://www.streetinsider.com/dividend_history.php?q=MSFT

rjvir 11y ago

According to Google Finance, it appears that Alphabet has a market capitalization of $517B, which is far different than the $558B quoted in the article. This does not appear to be a temporary fluctuation. https://www.google.com/finance?q=NASDAQ%3AGOOGL https://www.google.com/finance?q=NASDAQ%3AGOOGL Am I missing something? Based on the current market cap numbers on Google Finance, Apple is still higher than Alphabet.

tosseraccount 11y ago
Need to combine Google/Alphabet share classes.
- dragonwriter 11y ago
  No, the reported market cap on Finance already does that; the after-hours trading explanation seems the better explanation.
  - tosseraccount 11y ago
    "Alphabet shares (GOOGL) jumped 6% after Google's parent reported estimate-topping fourth-quarter results after the bell. Its combined share classes were then worth $554 billion, surpassing Apple (AAPL), which had a value of about $534 billion and whose shares were down slightly after hours." http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-google-apple-market-cap/79652616/ http://www.usatoday.com/story/tech/news/2016/02/01/alphabet-... Please note:https://www.google.com/finance?q=NASDAQ%3AGOOGL https://www.google.com/finance?q=NASDAQ%3AGOOGL and https://www.google.com/finance?q=NASDAQ%3AGOOG https://www.google.com/finance?q=NASDAQ%3AGOOG
    - dragonwriter 11y ago
      Yes, and if you look at the market cap on both of GOOG and GOOGL on Google Finance, you'll note that they are the same (after close -- during trading they seem to be very close but slightly different, probably for timing reasons) and if you do the math, you'll see that for each they aren't reporting the individual cap but the combined cap. My first reaction was that the problem was one or the other share class being excluded, and then I checked exactly the sources you cite and checked the numbers and realized that couldn't be the problem if.you used Google Finance reported market caps, because they don't report it that way.

wangii 11y ago

Microsoft reached an intraday high share price of $119.94 in December 1999. With 5,160,024,593 outstanding shares, it had a market capitalization of $618.9 billion. then what? what next?

adventured 11y ago
The glaring difference of course being that Microsoft was trading for roughly 88 times trailing earnings. Google is trading for close to 30 times earnings with this latest quarter. Google's valuation is obviously sustainable, Microsoft's was not at that time. What's next? Google is likely to become even more valuable as they have a lot of growth left and investors clearly like to give them a nice multiple.

rijusaini 11y ago

"If Google disappeared the world would screech to a halt". Yes it would, for me. Someone please unshackle me.

spectrum1234 11y ago

Wow these points really show Hacker News is bad at finance :)

iamgopal 11y ago

The elephant in the room nobody seems to notice is, they have so much data that they can actually look ahead of curve for any industry or tech, and so can have very good tactical advantage, and being open to jump in to any tech, they can steer much easily then the counterparts.

donohoe 11y ago

That is AMAZING for a company barely a year old. Kudos to all involved.

bane 11y ago

As an American I think it's pretty badass that something like 8 or 9 of the top 10 most valuable companies in the world are all American. I'm not sure if that means we're doing something right, but it's still pretty cool for a moment.

cvburgess 11y ago
As an American I find it actually very disappointing. We have the wealthiest, most powerful companies, and a government that threatens to shutdown every year. Many citizens can't afford healthcare and basic necessities, and yet we have companies with billions of dollars tucked away over seas.
arikrak 11y ago
All 10 of the 10 most valuable publicly traded companies are American (multinational) companies. #11 is Chinese and #20 is Swiss [1]. (Not that the largest 4 companies are tech companies, so that explains part of it...) [1] http://www.dogsofthedow.com/largest-companies-by-market-cap.htm http://www.dogsofthedow.com/largest-companies-by-market-cap....
- Hermel 11y ago
  This list is incomplete. Nestlé for example is missing (https://www.google.com/finance?q=VTX%3ANESN https://www.google.com/finance?q=VTX%3ANESN).
  - arikrak 11y ago
    Thanks, you can view a complete list on Google finance if you sort by market cap.[1] The top 10 are still US companies though. [1] https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stockscreener https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stock...
- tim333 11y ago
  America does companies well. If you're going to base a global corporation somewhere it's not a bad choice.

dschiptsov 11y ago

Valuation based entirely on hype and big names, without any released products or services?

jaxondu 11y ago
Precisely why the restructure Google into Alphabet. Market looks for potential earning. And the various moonshot projects is the marketing way of telling the market we're the future. R&D in the open is paying off in this sense for Alphabet/Google. And the market do not see those great potential products brewing in the labs of Apple, Microsoft, IBM etc.

Mkansagra 11y ago

Let's be realistic for once. There is no such thing as complete AI. AI means a piece of software that does whatever you tell it to do, acting like a human. Simply Artificial = Human made Intelligence = Brain power or thinking power.

pnut 11y ago
That may be technically true today, but it feels a little like parents taking credit for their child's accomplishments. That distinction means less and less as time goes on, anyway. After learning from a billion human lifetimes, and being coded by 100,000 humans' combined efforts, would it be such a surprise that something greater eventually emerges?
mcv 11y ago
> AI means a piece of software that does whatever you tell it to do But it can figure out by itself how to do it.

Mkansagra 11y ago

mark-r 11y ago

Am I the only one who didn't realize Alphabet == Google? When did that happen?

pavanky 11y ago
A few months ago. They re-organized the structure so that Alphabet became the parent company and Google became the subsidiary. Larry Page heads Alphabet while Sunder Pichai heads Google. Some of the companies purchased by "Google" became subsidiaries of Alphabet as well.

csomar 11y ago

So let's see, according to Google Finance. Not quite accurate number, only a few billions more or less. Apple Marketcap: $539B Google Marketcap: $537B Microsoft Marketcap: $435B Facebook Marketcap: $320B Total of these big 4: $1.8 Trillion Who said the bubble is going to burst this year?

yannickmahe 11y ago
What are the P/E ratios of all these ?

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