Google profit soars, easily covering losses on ‘other bets’

GOOGLE has lost nearly $2 billion on risky ventures aimed at everything from eliminating human drivers to curing cancer. Here’s why it doesn’t care.

GOOGLE’S digital-ad business is so profitable that its new parent company, Alphabet, can lose nearly $2 billion on risky ventures — and shrug.

Oh, and it’s just become the world’s most valuable publicly traded company.

On Monday, Alphabet Inc. released its first quarterly earnings report since Google reorganised itself under the new company. Net income exceeded analyst estimates for the quarter, sending Alphabet shares up nearly 7 per cent in after-hours trading.

Alphabet shares jumped nearly seven per cent to $US798. The company now has a market capitalisation of just under $795 billion ($US565 billion), just above the $758 billion ($US539 billion) of Apple, according to Dow Jones analyst Howard Silverblatt.

The earnings release spelled out the cost of running mostly experimental businesses that aim to do everything from eliminating the human driver to curing cancer. Those operations posted an operating loss of $1.69 billion ($US1.2 billion) on revenue of $212 million ($US151 million) in the final three months of last year.

Google, meanwhile, produced an operating profit of $9.57 billion ($US6.8 billion) on revenue of $29.83 billion ($US21.2 billion), driven by strong sales of advertising on mobile devices and YouTube.

Alphabet’s quarterly profit rose five per cent to $6.92 billion ($US4.92 billion), while revenue for the California-based internet colossus topped $30.01 billion ($US21.33 billion), a rise of 17.8 per cent.

According to Dow Jones, Alphabet is now only the 12th company to achieve the title of the S&P 500’s most valuable company in the history of the index. Apple took the title in August 2011. Other companies included Exxon Mobil, IBM and Microsoft.

Electronic screens post the price of Alphabet stock.

Originally published as Google profit soars, easily covering losses on ‘other bets’