Alphabet overtakes Apple as most valuable company; WhatsApp reaches billion users; Oil slump negative for US economy in short run; Dubai International stays world’s busiest airport

1 Alphabet overtakes Apple as most valuable company (Simon Bowers in The Guardian) Google’s parent company Alphabet has become the world’s most valuable listed company after announcing that its global revenues rose 13% to $75bn last year, and the group’s tax rate fell to just 17%.

In after-hours trading, the share price for Alphabet, Google’s parent company, immediately jumped 9%, implying a total stock market value for Alphabet of $568bn. That meant it eclipsed rival Californian tech firm Apple, which has a value of $535bn, making Alphabet the most valuable company in the world.

As chief financial officer, Ruth Porat, summarised the group’s tax position, there was no mention of the £130m 10-year tax settlement with HMRC that has led to widespread outrage. Instead, Porat highlighted that a better-than-expected settlement with the US tax authorities – relating to separate multi-year dispute – had seen the group’s effective tax rate drop sharply during the last three months of the year.

2 WhatsApp reaches billion users (BBC) Mobile messaging service WhatsApp is now used by a billion people every month, Facebook has reported. The Facebook-owned app now outperforms the social network’s own Messenger mobile app, which has 800 million monthly users.

The company said 42 billion messages and 250 million videos were sent over WhatsApp daily. But one analyst said WhatsApp still trailed behind local competition in some key markets. “There are big markets where WhatsApp isn’t the dominant player,” said Jack Kent, mobile analyst at IHS.

“WeChat in China has more than 500 million users, while Line is popular in Japan, and Kakao Talk is big in South Korea. But WhatsApp is certainly the most internationally successful. Part of that is down to its pure focus on communication, providing low cost chat that is very reliable.

“Other apps have focused on monetisation, games and stickers but WhatsApp’s appeal is that it is light on monetisation and it has now dropped its small annual fee completely.” Facebook bought the mobile messaging app in 2014, in a deal worth $19bn. The usage data the platform generates for Facebook could help the company improve its targeted advertising, which is its core business model, said Mr Kent.

3 Oil slump negative for US economy in short run (Straits Times) The US economy eked out anaemic growth in the final three months of 2015, and the struggling performance of the oil and gas sector was a major contributor to the slowdown.

Real gross domestic product rose at an annualised rate of 0.7 per cent in the fourth quarter, down from 2.0 per cent in the third and 3.9 per cent in the second, the Bureau of Economic Analysis (BEA) has reported. The economy was buffeted by a broad-based slowdown in consumer, business and government spending growth, as well as a deterioration in trade performance thanks to the strengthening currency.

The slowdown in oil and gas drilling accounted for the whole of the drop in business fixed investment in structures and probably contributed to the slowdown in equipment spending too. The economic slowdown during the second half of 2015 has sparked a vigorous debate about whether lower oil and gas prices have a positive or negative impact on the US economy.

Lower prices are clearly negative for oil and gas producers but positive for consumers, so to the extent the US is still a net importer of oil and gas the impact is clearly positive in the long run. But in the short run the impact is probably negative because the effect on oil and gas investment is immediate while the boost to consumer spending and energy-consuming businesses takes longer to filter through.

The dynamics are similar to the famous J-curve effect in international trade: a currency devaluation tends to worsen the trade balance in the short run because the rise in import costs is immediate while it takes longer for exporters to raise their foreign sales. Something similar appears to be happening to the US, which is not only one of the world’s largest oil and gas consumers but one of its largest producers too.

The oil and gas industry was one of the biggest and fastest-growing sources of investment during the 2010-2014 boom, and provided an enormous boost for a huge web of suppliers. The collapse in oil and gas prices has been an enormous negative shock for an economy which is also struggling to cope with an appreciating exchange rate and too many stocks in many other parts of the supply chain as well.

4 Dubai International remains world’s busiest airport (Gulf News) Dubai International saw through over 78 million passengers in 2015, more than enough to retain its title of the world’s busiest airport for international passengers, operator Dubai Airports has said.

A total of 78,014,838 passengers passed through the airport in the 12 months to December 31, 2015, a 10.7 per cent increase on the 70,473,893 passengers that used the airport a year earlier. Its closest rival, London’s Heathrow, handled 69.8 million international passengers and a total of 74,959,000 passengers including domestic in 2015.

Dubai Airports Chief Executive Paul Griffiths said 2015 was “another banner year” for the airport, according to Monday’s statement. Griffiths also said the $1.2 billion Concourse D, part of Terminal 1, will open this quarter.

India was once again Dubai’s strongest market in 2015 with 10,391,376 passengers, up 17 per cent compared to 2014, travelling on routes between the country and emirate. The UK was the second largest market for passengers with 5,682,307 passengers, up 6 per cent, and closely followed by Saudi Arabia with 5,466,358 passengers, up 12 per cent.

Cargo volumes also continued to grow in 2015, despite all dedicated freighter services moving to the emirates second airport Al Maktoum International at Dubai World Central (DWC) in 2014, Dubai Airports said. Dubai International handled 2,506,092 tonnes of air freight, up 3.4 per cent. December freighter volumes rose 5 per cent to 214,408 tonnes.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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