Alphabet Becomes the Most Valuable Public Company in the World
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If Apple starts going faster on AI then I think it will be very interesting between these two companies.
https://en.wikipedia.org/wiki/AI_effect#AI_is_whatever_hasn....
This concept seems to be a direct abstraction of hindsight bias.
In fact, the concept of hindsight bias feels very much like every aspect of life, also. As soon as you build the next great tower, you opt for a new wave of bigger, more powerful enemies (i.e., you level up), and so the solution for the last wave no longer feels that interesting anymore, and thus seems, perhaps, obvious.
OK, to be fair, search is still very important too (in fact the most important content provider for their ad business). So call them a "search and advertising company".
They use machine learning and are actively researching it, but that's true of a lot of companies. Is IBM an AI company?
That's how they've decided to brand themselves, at least (as of ~four months ago): http://adage.com/article/datadriven-marketing/ibm-replaces-s...
I'm not saying they don't do AI, I'm just saying it's not their unique focus that sets them apart from other companies. Search-and-ads sets them apart.
You could certainly identify very large datacenters, Big Data and now machine learning as tools that Google have pioneered. But they don't have an exclusive lock on those.
(Said the guy whose work is related to Android...)
People use Google for search, email, maps, etc. And that's what the company was built for. If they had a better way to monetize than ads, they would certainly drop ads.
“Oh, we’re really making an AI.” -Larry Page [0]
[0] http://www.wired.com/2014/10/future-of-artificial-intelligen...
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.
It doesn't necessarily mean that.
It's more common to associate "X" with their business competency.
If we always insist on X to be only defined by revenue, we then get the following type of soundbites that we pat ourselves on the back for:
- McDonalds is actually a real estate company and not a hamburger company because they make more money from rent than from food
- General Electric is really a bank because GE Capital has higher revenue than GE Aviation or GE Energy
- Harvard University is really a hedge fund and not a school because the endowment income is greater than the tuition paid by students
- Lebron James is actually an advertising spokesperson instead of a basketball player because he gets most of his money from corporate endorsements instead of the NBA player contract. Same thing can be said for NASCAR drivers and Olympic athletes.
Are the twisted examples above really how we categorize companies/celebrities? We don't label NY Times, National Geographic, and NBC/CBS/ABC/Fox as "ad companies". Instead we respectively call them "newspaper", "magazine", and "tv networks". Being a conduit for ads does not define each of them as an ad company.
It's much more reasonable to think of Google Inc as a AI/search/maps/cloud company that happens to get most of their revenue from ads. They are not an "ad company".
We don't compare McDonalds with Donald Trump development properties. We compare McDonalds with Burger King. We also don't compare Google Inc with Omnicom Group; instead we compare Google Search with MS Bing, and Android vs iPhone, and other technologies.
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.
eh, either way Google is described it's just trying to be a cute soundbite with next to no information.
You can call them an advertising company, but they create the products that most of their ads are seen in, so really they're an advertising company and a software company. They build the data centers all that software runs on or comes from, so they're also a data center company. And if they're using AI in most of their products these days (no idea), you could fairly add AI company on there too.
So what is the X in "they're an X company"? A better question is why does it matter what the X is? You don't gain any insight by filling it in.
Instead we could go crazy and use like two, even three sentences to describe what a company does, what its incentives are and where its constrained.
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.
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.
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-intelligen...
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.
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.
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.
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.
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.
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.
Presumably there's some point of diminishing returns on R&D for one company in the billions of dollars range...
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.
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.
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.
There's arguments for backups, etc but in reality if the common business person working at these companies sits down and none of their Google products work, their day will halt.
Edit: to clarify, my source[1] said 5 million orgs with 50 million individual users. Not counting Gmail obviously
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.
The biggest loss to humanity (in my opinion) would be all the translation data they hold privately. But Google really just people and money. If Google the entity disappeared tomorrow all those people who still know how to do the work will just start working on it elsewhere and catch up quickly.
20 years ago, nobody could have pictured living without AOL, they had search, the directory, email, Aim - and connectivity.
15 years ago, few people could have seen a world without Yahoo.
3 months ago Dorsey said Twitter is an essential part of the internet.
On the other hand, there were a few Chinese people there, and most of them seemed to have a non-halted life.
"In fact, DuckDuckGo gets its results from over four hundred sources. These include hundreds of vertical sources delivering niche Instant Answers, DuckDuckBot (our crawler) and crowd-sourced sites (like Wikipedia, stored in our answer indexes). We also of course have more traditional links in the search results, which we primarily source from Yahoo!, and in some regions and scenarios, Yandex and Bing.
I agree that Google vanishing in an instant would have a more tangible short-term effect than Apple doing the same. But I feel you paint them as (nearly) opposite ends of a spectrum. Google provides many centralized services that people have come to depend on, whereas Apple creates physical products that would continue to function even if the company ceased to be. But Apple provides some similar centralized services and its various stores that sell virtual products (apps, music, video).
Either disappearing would be inconvenient for a lot of people—notably those who use centralized services—but my opinion is that in both cases, people would adapt fairly quickly.
All that said, as someone who doesn't use services or products provided by either of these two companies, my instinct is to agree with you that Google feels like it provides greater net value to society than Apple.
Wait, what was your point?
No company is as dominant in any of those areas as Google is in its area, or they probably would be. Water and electricity are often public utilities; while there are big food companies, there's no parallel to Google; there are a number of major oil companies, but no one single dominant one -- but those of the many in the top tier that are publicly traded are valued highly (from tens of billions to hundreds of billions), and several are not public so that no public valuation exists.
If Google were abducted by space aliens I'd immediately start an online ad exchange supported by a ubiquitous cookie. If Apple were likewise abducted I'd fork Android and hire a good industrial designer and try to eat Samsung's lunch before they come to their senses.
Neither company makes anything the average user can't live without, and neither company has a monopoly on stuff that excites nerds like us. Both are very very good at some things, sure, but let's not pretend the world really needs them per se.
Ok, cheap shot, but seriously though, without these companies flagship products the world would be a poorer place. Even their competitors products would be significantly poorer. But it's not so much the present that would suffer from the loss of these companies as it is the future.
What am I missing? I don't know all the ins and outs of Google.
https://developers.google.com/apis-explorer/
There's a lot of services that depend on Google and changing all that code overnight is unlikely. Apple doesn't have that kind of 3rd party reach.
Google might (unlikely, but remotely possible) get split up by antitrust action, but it won't disappear through it, the same way AT&T didn't.
I don't use any Google services, personally.
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-pr...
We're not shifting from desktop to mobile. Mobile is increasing while desktop stays about the same.
We are shifting from print media, TV, excercise, talking, driving, academic studies and paid labor... To mobile.
That they're getting better at it is why click growth outpaces traffic growth. If they stayed the same at it then click growth would equal traffic growth.
> It seems unlikely it's just targeting, without spilling over into something that's bad for consumers.
It could be one or the other or both. Care to present any evidence or reasoning as to why we should make one conclusion or the other?
There might be something to dig into here. I'd like to learn more. Can you expand on your previous point?
And in the "free apps with ads" of the mobile store the situation is even worse... they'll often try all possible tricks to force you to click on the ads.
Like higher education, the online ads business seems poised to collapse.
In a lot of verticals without ads you would be concentrating most of the sales in the biggest players as it has become very hard to compete in organic search for anyone else.
Not in a long time; Firefox Mobile with Adblock Plus makes the web far more usable on a phone.
The constraints of a mobile device make adblocking even more critical than on desktop systems. If a browser or mobile environment wanted to differentiate itself, it could pre-install and pre-configure an adblocker.
b) You'd think this. From what I've seen, mobile ads have up to 4x higher CTR with a as much as a 30% lower CVR. This is from multiple high spend accounts I have managed. Fat finger misclicks? Mobile ad "cards" also look almost identical to the organic result cards.
Google used to roll major updates all of the time, now they come within 2 weeks of earnings releases, fairly consistently. Look for them to continue manipulate their black box (quality score) to help inflate CPCs, blend paid ads into organic (a la Baidu), reduce the number of organic results per page, increase the prominence of Shopping campaigns, remove advertiser control (no true exact match, or no exact match at all?) and generally try to squeeze SMBs by reducing organic visibility and subtly suggesting to try AdWords. Google's advertising business is at odds with providing the highest quality search results. They aren't really innovating in search, they're just turning dials to increase their earnings per mille for ads displayed.
Of course, one imagines there are many other explanations for growth, too.
http://infolab.stanford.edu/~backrub/google.html
Scroll down to "Appendix A: Advertising and Mixed Motives"
Can you clarify this statement?
So, absent any other variables...if mobile traffic is growing faster than desktop traffic, year over year, click growth would slow.
* Is mobile growth rate so high that it outstrips the reduced expected CTR for desktop users?
* Is mobile use not displacing desktop use, meaning desktop CTR is not falling as fast as anticipated?
* Is mobile use growing in places where there was previously no desktop use? Those users previously had a functional CTR of 0; onboarding them should increase the total clicks even if it reduces the mean CTR.
> So, absent any other variables...if mobile traffic is growing faster than desktop traffic, year over year, click growth would slow.
Sure, assuming that actual total traffic growth is constant; if desktop to mobile transition accelerates overall traffic growth, the increase in mobile traffic can be enough to even at a lower click/traffic rate increase total clicks.
Why? The shift from desktop to mobile means people spend more of their time with the opportunity to give clicks.
* 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.
Does Apple do research in biotech (Alphabet's Calico)? Are they developing drones delivering wireless internet to the world (Google's Skybender)? Do they have an investment arm (Google Ventures)? Did they start an ISP (Google Fiber)?
People see Alphabet's increasing outreach that almost seems ludicrous. Then they compare this with Apple who seems to have been doing iPhones and iPads for 6-10 years, and doesn't seem to be interested in anything else (though this is slowly changing with Apple apparently getting into home automation and self-driving vehicles). It doesn't matter if it is true or not. This is what people perceive. This is what makes them value Google more than Apple. For all we know smartphones and tablets could be disrupted by another technology (the same way PCs were disrupted by phones and tablets) and Apple may not be ready for this next tech disruption, while Google is placing bets in many other markets.
Maybe the only way around that is taking a page out of Alphabet's playbook and making a parent company with "riskier" subsidiaries with their own non-Apple brand?
I don't fully agree with this. Did you have the first version of the iPhone? No copy and paste? WTF.
Antenna signal dropping because "you're holding it wrong!"? WTF.
The only thing you can hold to the apple brand without any criticism is the industrial design of the packaging and look of their products has been consistent and un-matched.
There are plenty of UX issues that have arisen that take away from the polished experience.
Sure I like their products, but im not deluded to think that they are beyond reproach.
How many people do you really think tested the copy and paste functionality on the original iPhone before making their purchasing decision?
I think almost no one.
Meanwhile, since Google was founded, Apple went from the Mac company to the iPod company to the iPhone company. Apple has a proven ability to reinvent itself, with more agility and success than Google or really any other tech company. But this has never been reflected in the market. The perception you mention is based on who the companies are, not what they do.
Apple could announce all of those products tomorrow, and the needle wouldn't move. Apple is doomed because Apple, and Google is the market's darling because Google.
Apple does, or Steve Jobs did? I don't think Cook is anywhere near Jobs. Meanwhile, Larry Page is not only still alive, but is positioning his company so that he still has creative power and final say.
As much as I love Apple, I'm not as optimistic of their future without Jobs.
I don't think it's proven that Apple can reinvent itself from within. Which is not to say that they'll never have another hit product.
If you (correctly) disagree with this assessment, there may be money to be made here. If you agree with it, well, I understand why Apple wouldn't look very appealing.
Just looking at the "Apple vs. Alphabet Market Capitalization Over Time" chart, this story appears to be as much about Apple falling as it is about Alphabet rising. And in that case I see what Apple is selling today.
iPods are obviously on the way out. iPads have been losing to cheaper tablets for a while now. Macs have been neglected to the point you can't even get one with a Skylake CPU. And now, the last week's news that iPhone sales are in decline. It seems Apple's fall is all about what they are (not) selling today.
* Apple's quarterly revenue: $75.9b * Apple's quarterly profit: $18.4b * Apple's market cap: $538.7b * Apple's P/E ratio: 10.24
* Google's quarterly revenue: $21.3b * Google's quarterly profit: $6.8b * Google's market cap: 517.6b (pre-earnings) * Google's P/E ratio: 35.37 (pre-earnings)
* Facebook's quarterly revenue: $5.84b * Facebook's quarterly profit: $2.56b * Facebook's market cap: $319b * Facebook's P/E ratio: 89.22
Do investors really think Facebook can grow at the pace a 89.22 P/E ratio suggests? They're quickly reaching the point where everyone in the world who can get a Facebook account already has one. They're pushing hard to spread to poorer areas by offering Internet access, but how much marginal revenue/profit can a poor rural farmer add? If Facebook somehow magically increased their numbers tenfold at the same growth rate, which would make their numbers roughly match Apple's, the current P/E ratio would make them a 3.19 trillion dollar company.
People knock Apple for relying too heavily on iPhone revenue, but Google gets a pass because their even more unbalance reliance on search has a "bigger moat"? Their core product, ads, is something most people despise and put up with, not something they seek out. Let's hope that some of their moonshots actually pan out.
I don't think the market is efficient, it has a lot to do with perception. Amazon, for instance, is constantly doing press releases for products, even products that have no future (this is a deliberate strategy near as I can tell from my time when I worked at Amazon)... while Apple does 3 or 4 product introductions a year, and doesn't do a lot of PR stuff (Though Tim Cook is getting interviewed a lot more than Steve Jobs did.)
No idea what the rest of the company is like, but internally, Lab126 employees treat it as a stepping stone until their resume or skillset becomes good enough for Apple, Google, etc.
Facebook's financials are ~1/3 Google's and so is its P/E. It's a much younger company and seems possible that's it's revenue and profit could approach Google's.
I don't see anything unbelievable or even particularly unusual.
Let's go back in time to a point when Apple's #'s roughly matched Googles.
https://www.apple.com/pr/library/2011/10/18Apple-Reports-Fou...
$28.27b revenue, $6.62 profit.
In 2011, Apple's P/E ratio hovered around 14, with a stock price that fluctuated around $46-$56 throughout the year:
http://financials.morningstar.com/valuation/price-ratio.html... http://www.nasdaq.com/symbol/aapl/historical
A P/E ratio of 14, and the company basically tripled their numbers in ~4 years. Does Google's P/E of 35.7 suggests we can look forward to a rough 10x increase in Google's numbers over the next 4 years?
No, it means that investors didn't believe there was much room for further growth at Apple[1]. They were clearly wrong! (Note that if you think that they are still wrong then there is a good opportunity to make money here!)
(Also, P/E is often related to margin as well as growth potential. Google's better profit margin is a factor here).
[1] http://www.asymco.com/2011/03/24/analysts-apples-growth-next... - the quote here is "The P/E ratio has remained at despondent levels for over two years.... The logical explanation is that pricing reflects a consensus that growth will fall off a cliff... Growth may slow to 18 percent the following year."
You've got remember the billions of rural poor will probably be less poor in a decade or two.
all "other bets" are actually losing money, per their data.
https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
OP was pointing out investor's criticism of Apple as a one-trick pony due to iPhone - I am pointing out that outside of ads, nothing generates any significant profit at Google either, even more so actually.
but whatever, HN really is the wrong forum for certain topics.
And we only know that the "other bets" (non-Google Alphabet operations) are losing money in aggregate, not that all of them are losing money individually.
Except of course, the people actually paying for ads don't hate them... otherwise they wouldn't be paying for them.
And yet the percentage of people who watch the Super Bowl explicitly to see the ads is a non-trivial percentage of the viewing population (obviously anecdata, but I know many people who throw super bowl parties for groups who have no interest in the football, and just want to have a party while watching the moderately amusing, big-budget ads with breaks for football in between).
(Disclaimer: I work for Google, on open-source software that doesn't have anything to do with ads.)
* Google's quarterly profit margin: 31.9%
iPhone shipments didn't decline, iPhone shipment growth declined.
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.
[0]https://abc.xyz/investor/news/earnings/2015/Q4_google_earnin...
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.
[1] http://www.streetinsider.com/dividend_history.php?q=AAPL
[2] http://www.streetinsider.com/dividend_history.php?q=GOOG
[3] http://www.streetinsider.com/dividend_history.php?q=MSFT
It will be very interesting to see where Alphabet/Google go in the next 10 years.
(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....
[1] https://www.google.com/finance?ei=BzuxVqG2ItO5euz2pMAO#stock...
Second, I understand that part of the reason Apple executes well is because it minimizes distractions. But I believe a well-executing company like Apple should be able to take on more projects effectively.
For me, RSS is the way informational web should work.
I mean, Alphabet has military robots.
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.
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.
The company with the higher market cap is the one that raised $10bn using equity and not debt. You could say that the company with more equity has more control of their destiny as it has less debt (equity is owned by the company shareholders, debt is owned by third parties), but this is not what you wrote.
Er, there is a difference: A added a bunch of future debt-service expense that B didn't; presumably the expansion that each A & B funded has future expected revenue, but A's future expenses cut into that, while B, with equity financing, didn't add expenses. So, B's actual value should be greater than A's, which the market cap in your scenario reflects.
There are good criticism of market cap as value, but yours isn't one of them.
This is factually false. Ask anyone with a background in finance and they will tell you so.
Scenario 2: A's share price now has a dividend stream implying future returns, which will increase the future value of the shares.
If companies A and B start off with the exact same market cap, and generate the exact same profits every year, and A keeps paying off the profits in the form of dividends, and B refuses to do so and hoards the profits in its bank account, B's market cap will keep rising further and further ahead of A's market cap. Again, this is a basic financial fact, and anyone with a background in finance will tell you so.
Incidentally this is why when you hear anyone quoting the Dow you can tell immediately that they are either clueless or an innumerate moron.
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.
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?
Am I missing something? Based on the current market cap numbers on Google Finance, Apple is still higher than Alphabet.
then what? what next?
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.
More details on how Google manipulated search rankings manually to make more money:
From 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.
Within that report, they show how Google was able to tweak the questions until end users stopped liking something they did like with the previous set of questions.
The questions being tweaked were specifically about a type of site that competed with Froogle/Google Shopping that Google wanted demoted.
No. Google's purpose is to extract as much money as possible from advertisers. In other words, they find the most stupid and desperate scum willing to pay the most per whatever (i.e. "10x growth hackers"), then separate them from their wallets.
Some of the companies purchased by "Google" became subsidiaries of Alphabet as well.
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.
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?
But it can figure out by itself how to do it.
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-disappe...
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.
"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.
EDIT: Italicized additions. Thanks for the feedback.
This is not true. Stock price is marginal price of a share -- the point at which all sellers are askin more than all buyers are accepting, not the price that every share would sell for.