"The company name Alphabet isn't as frequently mentioned and familiar as its core business unit, Google. But I think it might be appropriate for a business that, in contrast to what many might think of it, is rapidly becoming so much more than its foundational internet search business. That diversification into a variety of different activities is what's going to put the company in high-growth mode over the coming half-decade, in my view. Read on for why."
"Years ago, what's now Alphabet could have easily rested on its laurels and continued to rake in buckets of money with search. It's a high-margin, relatively low-cost activity that will always attract valuable advertising dollars. After all, who doesn't want to place spots on Google's portal, which seems set to be the incumbent search engine for the imaginable future? So it's admirable that Alphabet management has been restless enough to plow into other revenue streams."
"More encouragingly, Alphabet has one foot firmly in the future. I'm thinking in particular of its Waymo self-driving unit, which in selected cities -- like mine, Los Angeles -- is rapidly becoming a common sight. In this respect, Alphabet is miles ahead (sorry) of anyone else, even the persistently beloved Tesla. Waymo has vast potential to be this country's go-to robotaxi service, and is firmly establishing itself as a reliable first mover."
Alphabet comprises multiple businesses beyond Google Search, including YouTube, Google Cloud, and Waymo. Search remains a durable, high-margin advertising platform that continues to generate substantial cash flow. YouTube provides an additional advertising magnet and long-term asset. Google Cloud is an established, robustly growing service trusted by many enterprises for digital asset management. Waymo, the self-driving unit, is operating in selected cities like Los Angeles and is positioned as a first mover in robotaxi services. The combination of diversified revenue streams and future-oriented initiatives underpins expectations for vigorous company growth over the next few years.
Read at The Motley Fool
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