Google’s Second Quarter Triumph: A Valuation at $540 Billion

Delving into the financial sphere, Alphabet, Google’s parent company, has also recently unveiled its earnings, adding to the zealous narrative of the tech industry’s successful second quarter. The Wall Street Journal reports an impressive increase of Google’s profit by 24% during Q2 of 2016, due to a solid demand for online adverts by users.

This surge of revenue, heavily propelled by Google’s ad business, witnessed an ascent of 21% to $21.5 billion in Q2, from the same period the previous year. This increase substantially surpassed the average analysts’ estimate of $20.76 billion. Facebook too, has echoed this prosperity by reporting noteworthy growth in ad revenue this week. However, Google still remains the undisputed champ, commanding roughly 31% of the $187 billion global digital advertisement market. A deeper dive into market share reveals Facebook has now clinched 12% of the global digital ads market, up by 3.4% from 2014. Overall, Alphabet’s profit also rose impressively to $4.88 billion, up from $3.93 billion the previous year.

Ad clicks via Google increased by a robust 29%, when compared to 2015, marking the fourth consecutive quarter of growth. The tech giant continues to be the preeminent cash cow of the Alphabet conglomerate, generating most of the revenue, despite a significant increase in earnings for other sister companies like Google Ventures, Nest and Google Fibre, which rose from $74 million last year to a commendable $185 million. However, operating loss also widened to $859 million from $660 million.

The cherry on top came when Alphabet, albeit momentarily, dethroned Apple to claim first place as the largest company in the world by market value. Alphabet came in a close second to Apple with a market cap of $540 billion, while Apple finished with a slightly higher market cap of $567 billion.

In April, Google announced that it reached a milestone, recording over a billion monthly users on Chrome for iOS and Android. As inferred from the earnings report, mobile users are significantly contributing to the mounting earnings of tech companies, painting a highly promising picture for the mobile tech industry. With these stellar results, Google’s position in the tech industry appears stronger than ever before.