Alphabet’s Other Bets Are Costly But The Stock-Market Should Remain Supportive… For Now

Alphabet Inc, formerly known as Google has just presented its 2015 results. Pretty decent earnings, by the way. But the novelty is the broken out earnings segment, comprising Google’s other bets.

So, now we know that the Other Bets provided $458 Million in Revenue against $3.5 Billion operating loss. Let’s see how the stock-market will accommodate this information during the next weeks. The loss is not huge when compared with the company’s earnings but, nevertheless, it is significant.

Back in August, I warned that the Alphabet’s new reporting method could be a risk, if shareholders initiate a movement to pressure Google to get rid of some of the money sucking bets. I keep my opinion that this could be roadblock on Google’s huge innovation track-record.

However, on the short-term, Google’s performance, the ownership structure and the stock-market sympathy towards the company, should be enough to keep things going smoothly for a while. But let’s not forget that one thing is to invest in moonshots when no one is seeing, other thing is to invest in moonshots when you are being closely watched.

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