AH Alphabet-2-1

Alphabet’s ‘Other Bets’ Reports $3.6 Billion Loss

February 1, 2016 - Written By John Anon

As is typical for this time of year, many companies have been releasing their end of Q4 results, as well as their end of year results for 2015. Alphabet is no different. It had been known Alphabet would be releasing its figures today and the company did send out an announcement towards the end of last week, detailing that they would be announcing figures in two different segments. The first was for “Google” and included everything we would more typically associate with the ‘normal side of Google’. The second aspect was being dubbed “Other Bets” and as the name suggests, was geared towards the more novel aspects of the Alphabet empire.

While the figures for Google is what most eyes will be focusing on, one interesting aspect which has now emerged is the actual figures for the ‘other bets’ segment. This is the industry which includes the likes of Project Loon, self-driving cars and everything else that could be considered to be a little more out-there. In terms of the main figures, these other bets manage to generate $448 million in revenue which is certainly an increase compared to the previous year in which similar projects are reported to have accumulated about $327 million in revenues.

However, what is probably of more interest is that for the Other Bets, Alphabet has announced an operating loss of close to $3.6 billion. Which is again significantly higher than what has been noted for 2015, with the figure much closer to the $1.9 billion marker. Of course, it is worth remembering that while these other bets do require substantial investment, they are projects which are not currently designed or have reached a level where they are able to generate any income, independently. This is more than likely what is causing the increased rates of loss for this year. As Alphabet has increased the levels of investment in these projects, they have yet to reach a profitable level. So While the headline is one which in itself, is interesting, it is somewhat to be expected and highlights how the recent move to separate the two ‘Google’ and ‘Other Bets’ entities are providing more clarity.