This is an analysis of Alphabet ($GOOGL), exploring their business and diverse sources of revenue.
None of this is investment advice, this note simply summarizes my research on this company. FYI $GOOGL is one the biggest positions of my stock-picking portfolio
What is the business of Alphabet ?
Alphabet is an information and data company that makes the vast majority of its money through digital advertising. It’s currently the most profitable company in the world.
It has 3 main pillars:
- The Ad Machine: Heart of the business, ~75% of total revenue
- Google Search (payments from companies to appear at the top)
- YouTube (ads watched before watching videos)
- Display Network / AdSense (middleman placing ads on millions of non-Google websites and taking a cut of the fee)
- Computing Infrastructure: Google Cloud, fastest growing segment
- Provides compute power, AI services & technical infrastructure
- Hardware & Subscriptions
- Pixel phones, Nest smart home devices, Fitbit wearables for hardware
- Google Play (cut from app sales), YouTube premium, Google One storage, Google workspace for subscriptions