They still haven't demonstrated that they can make significant money on anything other than advertising. They do a lot of stuff but nothing really turns into a profitable business. Compare that to Microsoft who have shown over decades many times an ability to get into new lines of business profitably.
Around 13% of total revenue then, growing year on year, that's nice. I would like to know what percentage of net profit is contributed by that fraction.
The other category is producing an operating loss.
Just as a stray example, for 3Q17 Alphabet generated $7.8 billion in operating income.
Google, the subsidiary, generated $8.7 billion in operating income for that quarter.
With continued solid growth of Google's cloud business, and the pull back on burning red ink on Google Fiber, maybe they'll push that other category to break-even soon. Regardless, Google is generating all of their profit. Google is a cash production marvel, nearly on par with the iPhone at this point. They should be able to hit around $40 billion in operating income in that subsidiary this year.
It's very possible that they produce a lot of revenue but no profit like Uber. On the other hand I would assume Google Cloud is making money since Azura and AWS are profitable for MS and Amazon.
What they are doing is exactly the opposite of what grandparent claimed Yahoo did.
They just create things that are useful.
Search, GMail, Maps, Chrome, Android, Youtube, Analytics and many other products and services.
If they can milk them from advertising, they will. But they don't necessarily care if it doesn't make money directly.
They own so many crucial parts of the internet that they cannot become irrelevant like Yahoo did.
Compare that to similar companies.
Facebook has only Facebook.com, Whatsapp and Instagram (which is basically just Facebook)
Amazon their store and AWS. Their other attempts (phone, tablets, Alexa, etc) have never took off.
Microsoft is in a powerful position as they have Windows, Office, Azure, XBox and Bing although they have not managed to gain share in new markets for quite some time.
I think Google is by far the most relevant company on the internet.
They gain market and the cash will flow later. This is in their DNA. This is how exactly it got started for them.
Their search was popular but was not making money for years. All they did was to focus on making it better, thinking that they'll find a way to make money later. And they did.
Exactly. Focus on providing value to your customer and all will be good with financials. Google grwth has actually accelerated as their numbers get bigger.
Not AS vulnerable but in the near future when you search thru voice commands and hear results back, all those google ads that your eyes scan can be thrown out of window.
