Alphabet Inc.

Alphabet Inc.

11 October 2016

Important legal information

The internet giant Google, part of the Alphabet group, plans to reduce its dependence on its search machine and the related commercial earnings.

In the future the company wants to shift the main focus on cloud-services. Until 2020 the earnings should primarily be generated by this business area.


The competition within the industry is quite strong: Amazon Web Services gained eight billion USD of earnings next to Microsoft. To be equipped for the long-term Google invested large sums in the development of its cloud services. Recently the company published last years expenditures, which were around USD 11.2 billion. In addition they’ve also acquired five firms in order to support their cloud industry.


For 2017 Bloomberg analysts estimate a revenue increase of 16 percent to USD 85 billion and an 20 percent increase of earnings.


The expansion to other markets is also up for discussion: Last Tuesday the group presented its new smartphone “Pixel”. It is available in two sizes and will enable users access to the new Google-assistant, which is supposed to give advice at any time.


One of the most valuable new features of the smartphone is the camera. During the presentation the speaker emphasized: “ It is the best camera anyone has ever built”. Tests from camera experts of Dxomarks confirm that statement. The future will show how successful sales will really be and how the new phone can compete against Apple’s iPhone.


However, Google is not completely new to the smartphone sector: Every year up until now the company released devices in cooperation with LG or HTC, like for instance the “Nexus”. Although it wasn`t really successful, according to business insiders.


The Android software of Google on the other side is a huge success. Currently 80 percent of smartphones use Android. Compared to Apple’s IOS market share of only 15 percent. At the moment Samsung is the market leader for Android smartphones which it is why it seems reasonable for Google to release its own devices.


Furthermore, Google presented the virtual reality headset “Daydream”, a new Wi-Fi router, a renewed Chromecast stream stick and the speaker “ Home”, which contains the integrated Google system. This could open a new business area, which targets the Home automation market and extend Google’s food chain.


On the stock exchange the Alphabet shares keep on being in demand: Bloomberg consensus set the 12-month target price to 925.83 USD and as of October 11th 2016, the share price of Alphabet opened at about USD 788.66, with an market capitalization of USD 549.168 billion. According to Bloomberg, eight analysts set the stock on BUY and two on HOLD recommendation. No analyst sets Alphabet on SELL.


05/12/2022 02:15:20