It wasn’t terribly pleasant for Alphabet (Google) and Microsoft stockholders this past week. Both companies missed revenue targets, more or less, and thus suffered from lower stock prices. For Google, it’s pretty much the same old problem. Most of its revenue comes from one product, search, and, to a lesser extent, Google Play, Android’s app store. While the company continues to pour money into other ventures, they still aren’t paying off.
Even the purchase of Nest, a company that makes intelligent thermostats and smoke detectors, hasn’t been quite the cash cow Google expected when it bought the company in 2014 for $3.2 billion. That’s somewhat higher than Apple paid for Beats Electronics, a transaction that was greeted with skepticism by tech and financial pundits.
However, Beats was a successful company before Apple took it over, particularly when it came to its line of high-end headphones. Beats Music was still a developing service that now appears to be paying off in its guise as Apple Music. But, according to published reports, Nest generated a paltry $340 million in sales in 2015. That’s not so terrific when you consider the purchase price.