1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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After taking a closer look at the connected television advertising market, we believe Google's YouTube will be one of the main beneficiaries in this fast-growing business. With a strong network effect driving overall YouTube user growth and a growing percentage of them consuming content on connected TVs, we expect YouTube to attract more advertisers and command higher prices over time.
Alphabet is a holding company, with Google, the Internet media giant, as a wholly owned subsidiary. Google generates 99% of Alphabet revenue, of which more than 85% is from online ads. Google’s other revenue is from sales of apps and content on Google Play and YouTube, as well as cloud service fees and other licensing revenue. Sales of hardware such as Chromebooks, the Pixel smartphone, and smart homes products, which include Nest and Google Home, also contribute to other revenue. Alphabet’s moonshot investments are in its other bets segment, where it bets on technology to enhance health (Verily), faster Internet access to homes (Google Fiber), self-driving cars (Waymo), and more. Alphabet’s operating margin has been 25%-30%, with Google at 30% and other bets operating at a loss.
