Google’s parent company, Alphabet, remains dominant, hitting a 14% revenue increase year-on-year despite the high voltage searchlight the United States antitrust suit has beamed on its activities. The company is ramping growth and taking market share across most of its core operating sectors.
The tech giant’s parent company, Alphabet, reported revenue of $46.17 billion for the three months ending in September — a 14% increase from the same period last year — highlighting its continued dominance even while facing numerous obstacles. The company also reported net income for the third quarter of $11.2 billion, blowing past analyst estimates. Alphabet (GOOGL) stock rose more than 8% in after-hours trading on Thursday.
“We had a strong quarter, consistent with the broader online environment,” Sundar Pichai, CEO of Alphabet and Google, said in a statement. “It’s also a testament to the deep investments we’ve made in AI and other technologies.”
But while Google logged great numbers, Apple made it clear that the post-hardware business era has indeed arrived. The iPhone sales slumped 20% but services came to the rescue.
“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” said Tim Cook, Apple’s CEO.
“Despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone lineup, has been tremendously positive.
“From remote learning to the home office, Apple products have been a window to the world for users as the pandemic continues, and our teams have met the needs of this moment with creativity, passion, and the kinds of big ideas that only Apple can deliver.”
From Google, we go to Zoom which has also done very well, becoming a bigger company than ExxonMobil: “Zoom, like many other tech companies, has seen an increase in earnings during the pandemic that has pushed its valuation to $139 billion, more than Exxon Mobil’s $138.9 billion. The teleconferencing app witnessed unprecedented surge following COVID-19 induced lockdowns that confined people at home, forcing a shift to virtual life.” That success of Zoom has seen it eclipsed the whole of the Nigerian Stock Exchange (NSE) by a factor of 3! Yes, Zoom is three times more than the whole value of the Nigerian publicly traded companies, including our banks, insurers and everything. Zoom joins Naspers of South Africa, whose combined direct & indirect value is more than 3x the value of NSE.
At the time of drafting this report, Zoom sported a market valuation of $131 billion, compared to the Nigerian Stock market with a value presently standing at $42.1 billion (N16 trillion), using the official exchange rate of N380 to $1.
But while Zoom has captured a lot of value, Skype which began many years before Zoom, has struggled. Indeed, Skype was great in destroying values for the telecommunication sector but was unable to capture any for itself. If you are to make a call from Lagos to London via MTN which could cost you say $10, and you decide to use Skype, there is a possibility that only a $2 data would be expensed for the Skype call. So, technically, Skype has destroyed $8 in the telecoms sector since itself did not capture the $8 which was denied MTN. Of course, you saved your $8 and could use it to buy amala and enjoy zobo drink.
That inability to capture value is the reason why Skype has not fully added value. Skype is currently a business under Microsoft; it bought it $8.5 billion in 2011. Today, no one expects Skype within Microsoft to be close to anything Zoom is logging in the market. Nigeria needs winners and pioneering entrepreneurs as we are severely underperforming as a nation!
In this video, I challenge us to use the One Oasis Strategy and Double Play Strategy to build business models that will ensure that we capture enterprise value even as we create for customers. Skype creates great value for customers but it has struggled to capture most value; so, Skype remains a sojourner, constantly being passed around by buyers and sellers. Do not be like Skype.
Markets are shifting and it is time you ensure that you are in the right domain, and that you are using the right business model in your business operation.