In January 2019, Alphabet – the parent company of Google – was dropped from the Biznews global portfolio after delivering returns of over 100% in four years. Since the global portfolio sold the share at $1,091, it has risen to just under $1,480. But as the latest results illustrate, the things that worried us last year are still prominent concerns. In this podcast, which features content from The Wall Street Journal’s Tech News Briefing, I explore Alphabet’s latest results and ask the question: Did we make the right call? – Felicity Duncan
Alphabet is a tech success story. When Google launched as a search algorithm twenty-odd years ago, no one imagined it would grow into one of the world’s most profitable companies. Yet last week, Alphabet once again topped a trillion-dollar valuation as the company has continued to deliver huge cash flows from its advertising business.
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Yet, despite its incredible growth over the years, Google is not without its problems. The digital ad space is getting more competitive – Google has lost ground to Facebook in the last ten years – and its latest venture, cloud computing, faces stiff competition from dominant players Amazon and Microsoft. Although its revenues continue to grow, the company has struggled to meet analysts’ expectations. At the same time, the company faces competition probes in jurisdictions around the world and increasing regulations on how it collects and processes its most valuable commodity – user data.
Is Alphabet still a good bet? Or was the Biznews global portfolio right to drop it a year ago?
