Silicon Valley’s Tech Giants Are Hiding Gems Like Instagram, YouTube And Stubhub From Investors
Google GOOGL -0.49% has rebranded as Alphabet, Microsoft MSFT +2.13% is changing the way it is reporting earnings to investors, eBay EBAY -4.17% spun its PayPal division earlier in the year and Hewlett-Packard HPQ +3.45% in the process of a similar split.
There’s a common denominator. A much brighter spotlight is about to be placed on Silicon Valley tech giants and the businesses they’ve either developed or acquired over the years.
Alphabet is designed to put greater scrutiny on the bets made by Google co-founders Sergey Brin and Larry Page outside of web search. After pressure from billionaire investor Carl Icahn, eBay decided to split its payments division PayPal from its online marketplace, allowing both high margin businesses to stand on their own. Since Sayta Nadella was appointed CEO of Microsoft he’s tried to give shareholders a more clear picture of the company’s push into cloud computing and mobility, recently restructuring reporting lines.
And yet even with all of the shape shifting in Silicon Valley, there’s still a lot investors don’t know about the tech industry’s biggest names.
How much does YouTube contribute to Google’s top and bottom lines versus its search business?
Is StubHub the Uber of sports for eBay?
Poring over financial statements and earnings releases won’t say much. Without a clear picture on the sales and profits generated by large acquisitions and fast growing products investors are left with an incomplete understanding of earnings or management performance.
Here’s a list of the five major businesses hidden inside big tech firms that should be better disclosed to investors.