'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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags GoogleR&Demerging technology

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?