Alphabet's 'Other Bets' Starting To Show Signs Of Improvement

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Earlier today Alphabet released its financial results for the last quarter, Q3 2016. As to be expected, the company announced a fairly substantial amount of revenue and to the tune of $22.4 billion. On the face of it, a nice amount and certainly a year-over-year increase as last year for Q3, Alphabet took in only about $18.6 billion. In percentage terms, that means Alphabet saw an increase year-over-year of about 20-percent, give or take.

The issue with this though, is that nearly all of that revenue has come from the Google side of things. As most who follow tech news will know, last year (and when Alphabet was formed), the company split its results into two distinct sectors. The 'Google' sector, encompassing most of the bread and butter aspects like actually Google and its ad revenue and the 'Other Bets' sector. The latter of which is a rather apt name as this sector is focused on the other avenues of Alphabet's business that are a little bit more out-there. The ones which are not just 'other bets', but are actually real bets and ones which Alphabet probably expects to lose money on – which was also likely the logic behind separating the Google and Other Bets sectors to begin with..accountability.

Either way, the loss of money was pretty much what was announced earlier today for the Other Bets. According to today's results, Alphabet's Other Bets only managed to collectively pull in about $193 million in revenue. Which to say is less than the Google side of things, would be a vast understatement. It is a blip in comparison. Yet, these Other Bets are the ones which cost a fair bit to maintain. A cost which coupled with the $193 million in revenue, resulted in a net loss for the Other Bets to the tune of $865 million. So it does seem to be the case that a year on, these Other Bets are still not quite pulling their own weight.

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Although, they have started to. Compared to last year, the results of the Other Bets are better. Not massively better, mind you. But better nonetheless. By the end of Q3 of 2015, the same 'Bets' had managed to only accumulate revenue in the region of $141 million and again saw an operating loss of close to $980 million. So while they are still hemorrhaging money, these Bets do (at least on paper) seem to making some improvement towards their independence. Not only has the operating loss lessened, but the revenue has increased. In fact, if you do not compare the likes of the Other Bets to the Google side of things and just focus in on the numbers, than the Other Bets actually improved year-on-year (in percentage terms) better than the improvement noted by Google. Of course, in monetary terms the two are incomparable, but this should at least be some consolation to Alphabet – that the Other Bets are starting to show improvement and not actually, getting worse. Although, if the recent reports like the culling of support for Google Fiber is anything to go by, then those lesser losses might not be just a result of improved performance of the Other Bets, but a tightening of the belt when it comes to funding them.

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Editor-in-Chief

John has been writing about and reviewing tech products since 2014 after making the transition from writing about and reviewing airlines. With a background in Psychology, John has a particular interest in the science and future of the industry. Besides adopting the Managing Editor role at AH John also covers much of the news surrounding audio and visual tech, including cord-cutting, the state of Pay-TV, and Android TV. Contact him at [email protected]

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