• by Thom Forbes  @tforbes, February 2, 2016

All the Ts were crossed for Alphabet in the fourth quarter ending Dec. 31, according to results released yesterday. Profits jumped 5% over the same period in 2014, boosting year-end revenue 18% to a record $21.3 billion. The Mountain View, Calif.-based company snatched the “world’s most valuable company” title from Apple as investors reacted to the news in after-hours trading. 

“Its shares rose more than 9% at one point, later trimming the gains to about 4.6%,” writes Anthony Mirhaydari for CBS Market Watch.

“Alphabet will officially supplant Apple in market value if the two companies open at those levels on Tuesday,” writes Jessica Guynn for USA Today.

“Google is in the pole position. The core business is cranking along and picking up speed. We love it when businesses re-accelerate,” BGC Financial analyst Colin Gillis tells Guynn.

“Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we've been investing for many years,” Alphabet CFO Ruth Porat says in a release about the earnings on abc.xyx. The Q4 earnings call is posted here.

“Alphabet has retaken the crown not because of the successes of its Android mobile software or Nexus mobile hardware but because of its growing share of the mobile ad market,” Mirhaydari points out for CBS. “According to eMarketer, Google is poised to take 32% of the mobile ad market this year ahead of Facebook at 20%.

Wall Street also appreciates the increased transparency at the company.

“Google's recent push to streamline its unwieldy businesses with a new corporate structure and its booming advertising machine have energized investors,” Paresh Dave and Andrea Chang point out for the Los Angeles Times.

Wired’s Davey Alba provides a “quick refresher” on Google’s surprise restructuring announced in August that separated its bread-and-butter business from its culinary experiments. As a result, the results were “split in two: Alphabet’s massively profitable search and advertising business (which includes Google), and its ‘other bets’ — the so-called moonshots — which include Google Fiber, its high-speed Internet service; Venture and Capital, its early and growth-stage investing arms; and X lab, home to such efforts as self-driving cars and delivery drones; among others.”

But advertising is clearly in the driver’s seat.

“Revenue from advertising climbed to $19.08 billion, up 17% from the previous year, as sales for Google websites specifically rose 20%,” writes CNBC’s Jacob Pramuk. “The Internet giant's aggregate paid clicks, a key advertising metric, increased 31% from the previous year, beating consensus expectations of about 22%, according to StreetAccount. Aggregate cost per click, though, fell 13% year over year.”

Meanwhile, “we got our first peek at exactly how much those moonshots cost, and how that expense compares to what core business is bringing in Alphabet's fourth quarter earnings report,” Ben Popper writes for The Verge. “Over the last three months, Alphabet spent $3.56 billion on its ‘Other Bets’ over the course of 2015. That is a roughly 83% increase over the amount Alphabet lost on its moonshots the year before.”

Popper suggest that the strong results “will likely give all those money losing ventures more breathing room, at least in the short term,” while reminding us that “Alphabet has hinted that it would be more disciplined about reigning in or shutting down entirely moonshot projects that were not evolving into profitable businesses.”

There are two main reason why “search is still the jewel in Google’s crown,” writes Alex Hern for The Guardian. “The former is PageRank, the invention that sparked the whole company. Dating back to [cofounders Larry] Page and [Sergey] Brin’s days at Stanford, it replaced the clunky search indexes of the age with a slick algorithmic approach.”

That innovation propelled it to the top of the search-engine pack.

But the second reason, Hern writes, is not so often noted and “was only realized once it had already achieved that dominance: there is nowhere more valuable to advertise than on a search results page.”

In the end, the market is clearly enthralled with Google’s “more investor-friendly tone,” Conor Dougherty observes for the New York Times.

But “the reality is that, in revenue terms, nothing about Alphabet’s business has changed,” he writes. “Google began 2015 as a giant advertising company connected to a collection of intriguing science projects. Alphabet ended the year as a collection of intriguing science projects connected to a highly profitable advertising business.”