First it was Apple, the Amazon, and soon after Microsoft. Now, it’s Google’s turn to claim the bragging rights of being a $1 trillion company among its US tech firm colleagues.
The Big 9 0s
In the big leagues of Silicon Valley, reaching a $1 trillion valuation has always been seen as the unreachable threshold that separates industry legends from budding innovator firms. Apple made history in 2018 when it was the first to reach it, and now, Google has finally crossed that coveted finish line.
Currently, the three trillion-dollar US tech firms are Apple, Microsoft, and Google. Amazon dropped a few billions since it earned the accolade and is now worth $924.52 billion as of this writing, not too far off.
Internationally, the only company rivaling these giants is Saudi Aramco, the petroleum giant that recently held the world’s largest IPO.
The most recent earnings report of Alphabet, Google’s parent company, was that of Q3 2019, reported late October of that year.
Here’s how the company did in comparison to analysts’ expectations, as per CNBC:
- Earnings per share: $10.12 vs. $12.42 per share expected, per Refinitiv consensus estimates.
- Revenue: $40.5 billion vs. $40.32 billion expected, per Refinitiv consensus estimates.
- Traffic acquisition costs: $7.49 billion vs. $7.48 billion, according to FactSet.
- Paid clicks on Google properties from Q3 2018 to Q3 2019: 18%
- Cost-per-click on Google properties from Q3 2018 to Q3 2019: -2%
As expected, advertising still represents a majority of Google’s revenue, with it scoring $33.92 billion in Q3, compared to $28.95 billion Q3 2018.
Google’s “other revenue,” which includes hardware like its Pixel phones and cloud products, came in at $6.43 billion, surpassing expectations of $6.32 billion, according to Factset.
In fact, Google has been putting great emphases on this “other” category, like most rivals. It bought out wearable firm Fitbit last year, and is investing in everything from autonomous cars to healthcare and the cloud and much more.
Q4 results are expected to be released in February.
It’s not all sunshine and rainbows for Google
While Google has a lot to celebrate with this latest achievement, it’s got a lot to dread as well.
Google has been in the crosshairs of regulators for a very long time for user privacy malpractices it’s suspected of. Most tech companies in the business of commoditizing data have recevied their fair share of scrutiny in recent years. From Facebook, to Apple and others, none have been spared. Not long ago, in the summer of 2019, Facebook was fined $5 billion by the US Federal Trade Commission (FTC), a record-breaking number to this day. Still, some industry experts believed Facebook got off lightly given its transgressions.
Today, Google faces similar scrutiny. After all, the search engine turned megabrand holds one of the largest collections of user data in the world, and as such, is being held accountable for the way it handles this information.
As per Reuters, Google has always said that it uses data to better its services and that users can manage, delete and transfer their data at any time. We hear similar PR talk from Facebook when similarly probed.
Trouble in paradise?
Google’s corporate code of conduct has long been “Don’t be evil,” since 2000.
Since May 2018, this was no longer the case, with only a small mention of it at the bottom of the 6300-word official document.
It seems the fairytale-like slogan has lost all meaning for Google, as the company now struggles with internal strife.
“For years, Google was seen as the gold standard of office life,” CNN writes. “The company pushed workplace culture to new frontiers with enviable benefits such as free meals, office slides, onsite childcare and an emphasis on transparency. But Google is quickly developing a very different reputation as it confronts a mounting backlash from its own employees.”
From accusations of mishandling inter-employee misconduct, to opposition from employees about the company being involved in US military projects, as well as firing employees that have protested company practices, the reality reflects serious trouble in paradise.
Achieving $1 trillion valuation might be a call for celebration for the famed search giant, but it’s far from smooth sailing going forward.