'Big bets' cost Google parent, Alphabet, US$3.6 billion in losses last year

The losses were more than offset by its core search and advertising businesses

Alphabet, the parent company of Google, racked up US$3.6 billion in losses last year on investments in "big bets" such as self-driving cars and Internet balloons.

The company was known to be spending heavily on these items but revealed actual figures for the first time Monday when it broke out results separately for its core Google business and for big-bet investments, which it also calls moonshots.

The losses for those items were much higher in 2015 than in 2014, when they totaled $1.9 billion. And they brought in just $448 million in revenue last year.

Still, Alphabet says it stands to reap rich rewards in the long term if any of those bets pay off. They also include its investments in smart thermostat company Nest, Google Fiber, and medical science, including efforts to build a smart contact lens that measures glucose levels.

The losses from Alphabet's big bets were more than offset by the profits made by Google and its core advertising and search businesses. Google generated $23.4 billion in operating income last year, on $74.5 billion in revenue.

Google reorganized itself last year under a holding company called Alphabet, which consists of Google and then other business units that place long term bets on emerging areas. It said the move would provide more visibility into how its core search and ad businesses are doing.

Alphabet as a whole reported strong results for last quarter. Revenue for the three months to Dec. 31 was $21.3 billion, up 18 percent from the year before and higher than the $20.8 billion analysts had been expecting, according to a poll by Thomson Reuters.

Net profit for the quarter rose to $4.9 billion. On an adjusted basis, net earnings per share was $8.67, up 28 percent and much better than the $8.10 analysts had forecast.

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

3 ways customer data can increase online sales conversion

Data has been an increasingly critical factor in improving the efficiency and effectiveness of marketing and business operations.

James Bennett

Chief experience officer, Kalido

Our sharing future is both terrifying and exciting

Discussing the future in a realistic fashion is often a disappointing prospect. For all the talk of hoverboards, jetpacks and lightsabers changing the way we do things, the reality tends to end up being something as mundane as a slightly cheaper way to get around the city.

Jason Dooris

CEO and founder, Atomic 212

Queue experiences that are distinctive, memorable and shareable

Customer service that’s quick, easy and convenient has been shown to boost customer satisfaction. So it’s an odd juxtaposition that customer queues have become a sharable customer experience.

Hi James, shouldn't marketers also be focusing on collecting and utilizing up to date first-party profiling data on customers so that mes...

Tom

3 ways customer data can increase online sales conversion

Read more

Wouldn't reconnecting with younger consumers be in direct contravention of the code on alcohol advertising?

Tim Palmer

Vodka Cruiser reconnects with younger consumers via category-first Facebook Live campaign

Read more

Thanks for the article Jennifer, you raise some interesting points. The supermarket and shopping centre examples particularly struck a c...

Jill Brennan

Why marketers should take note of social robots

Read more

Winning the retail game is really tricky at this point in time. Many retailers have declared themselves as bankrupt. But yes harnessing t...

Vanessa.M.Magers

​Bricks and clicks: Balancing digital and physical to win the retail game

Read more

Excellent article, Thank you.

Steve Beards

How Aprimo hopes to help marketers tackle distribution of content, funds and data

Read more

Latest Podcast

More podcasts

Sign in