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How's The Moonshots Business? 5 Things To Look For In Alphabet's Earnings Report

For the first time, the company formerly known as Google will report the financial performance of its many different subsidiaries.

How's The Moonshots Business? 5 Things To Look For In Alphabet's Earnings Report
[Photo: antb via Shutterstock]

If you’ve been confused about how Google fits into Alphabet, and how the recast search giant’s many different divisions perform, you’ll want to pay close attention next Monday.

That’s when Alphabet will, for the first, time, report quarterly earnings with specific breakouts on each of its many different divisions.

In October, the company reported its third-quarter earnings, but at that point, it had not yet gone through an entire quarter since the announcement that Google was reorganizing under the umbrella organization known as Alphabet.

Now, we should get our first look at the larger organization and how it all fits together—and a sense of whether the company’s various moonshots are financially viable, or whether the whole operation is hanging on the engine that is Google’s search and ad business.

As we get ready for Alphabet’s February 1 fourth-quarter earnings report, here are a few things that Fast Company is eager to find out.

1. For the first time, Alphabet will report on the performance of its various subsidiaries.

As we know it today, there are eight such divisions within Alphabet: Google (search, YouTube, maps, Android, ads, and apps); Calico (life extension); Fiber (super-fast Internet); Google Ventures (the company’s venture capital arm); Google X (its moonshots arm, covering things like Google Glass, the Internet by balloon effort known as Project Loon, self-driving cars, and others); Nest (thermostats, smoke and carbon monoxide detectors, as well as Dropcam); Life Sciences (smart contact lenses); and Google Capital (its investment fund).

We’re eager to know how each of these divisions is doing, and how much the whole company is leaning on Google’s search and ad business for survival. One can imagine that Nest is making some money, but it’s likely that Google proper is the money machine that keeps everything going. That said, it will be quite interesting to see how investors react if and when Alphabet reports that some of its subsidiaries are losing money.

2. Can Alphabet overtake Apple as the world’s most valuable corporation?

According to The New York Times, the company is within striking distance (within 10%) of its total market cap passing that of Apple. Of course, Apple has historically had deep slips in its stock price, only to recover and shoot above its historical highs, so the bet here is that even if Alphabet gets close, Apple will stay on top. However, it’s worth noting that investors were so happy about Alphabet’s Q3 earnings report that the company’s stock price immediately shot up 11%. Will the same happen this time around?

3. How much will we learn about Google’s virtual reality efforts?

Everyone knows that Facebook is all-in on virtual reality, having spent $2 billion on Oculus VR, but we’ve not heard all that much about what Google is up to. We know that YouTube has been doing more and more with 360-degree video—a form of VR—and we know that Google recently put Clay Bavor in charge of its larger VR efforts. What we don’t know a lot about is where that’s going. Hopefully the company will shed some light on this, as well as give a sense of how it’s been going so far.

4. Will Alphabet give us a clear view into how CEO and cofounder Larry Page spends his time?

The related question is whether Google CEO Sundar Pichai will be a presenter for the quarterly earnings call.

5. What about Twitter?

With Twitter suffering setback after setback, and recently shedding a number of top executives, it will be interesting to see if Alphabet shares much insight into its partnership with the microblogging service. As part of that partnership, Google's search results will often include real-time information gleaned from Twitter. Given that the two companies are already working together, some have wondered if Google, er, Alphabet, might buy the troubled Twitter. With its stock price languishing well below its IPO price, many have speculated it is an acquisition target. There are other obvious suitors, such as Facebook, but Google could be the best fit, given that it has worked with Twitter on and off over the years.

Alphabet will report its earnings just after 4 p.m. ET on February 1. Fast Company will be following the report and the subsequent conference call with investors. Please come back then to see what the company has to say for itself.

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