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Alphabet: Alpha-Bet?

What Is Alphabet?

"Created" in 2015, Alphabet is a collection of companies; essentially a holding company for Google—The God of information in the internet age. The company offers a variety of software and Internet-related services and solutions, including web browsing and searching, cloud computing, streaming entertainment, mobile operating systems and applications, and more. Google has always invested in many far-reaching areas of technology — such as internet search, mobile phones, artificial intelligence, self-driving cars, and health technology. Although the various “moon shots”, like: driverless cars, Google Glass, the health initiative Verily, and drones that emerged from the “X” division are engrossing, the company does one thing incredibly well: sell advertising. And the vast majority of that advertising is sold in connection with the core Google search capability. Throw in not just the moon shots, but also purchases made through the Google Play app store, various hardware devices like Nest home products and Pixelbooks and phones, YouTube subscription products, and even Google Cloud, and roughly 80 percent of Google’s over $250 billion in revenues still persistently comes from advertising.

As of 2021, Alphabet generated over $257 billion in revenues, for the first time in its history. Over $209 billion (over 81% of the total revenues) came from Google Advertising products (Google Search, YouTube Ads, and Network Members sites). They were followed by over $28 billion in other revenues (comprising Google Play, Pixel phones, and YouTube Premium), and by Google Cloud, which generated over $19 billion in 2021.

For some context, in 2004 Google generated almost a billion dollars in revenues, and it was worth about $23 billion as it IPOed. In 2021, Alphabet become a two trillion-dollar company. Back in the early 2000s, the company had started to build its advertising machine. This journey culminated in 2004 when the company had managed to put together the various pieces (Google AdWords and Google AdSense) of its advertising machine, thus scaling up its revenues on top of a growing search platform. At the time the advertising machine was primarily based on Internet traffic from desktop devices. Today most traffic comes from mobile.

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