Google's money churning ad engine sputters in rough economy

SAN FRANCISCO, United States - Google parent Alphabet reported quarterly earnings that fell short of market expectations as belts tightened in the digital ad market that drives its revenue.

Alphabet said it made a profit of $14 billion in the third quarter on ad revenue that grew just 6 percent to $69 billion when compared with the same period of last year.

Aside from one period at the start of the Covid pandemic, that would mark the weakest revenue growth at Alphabet for any quarter since 2014.

"When Google stumbles, it's a bad omen for digital advertising at large," said Insider Intelligence analyst Evelyn Mitchell.

"This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate."

Alphabet shares slipped 6.8 percent to $97.35 in after-market trades that followed the release of the earnings report.

Google's foundation in advertising on its heavily used search engine does give it an advantage, however, over other ad-reliant tech firms such as Meta, Snap and Twitter, the analyst added.

"Over time, we've had periods of extraordinary growth and then there are periods I viewed as a moment where you take the time to optimize the company to make sure we are set up for the next decade of growth ahead," Alphabet and Google chief Sundar Pichai said on an earnings call.

"I view this as one of those moments."

Alphabet chief financial officer Ruth Porat said the financial results in the quarter showed "healthy fundamental growth in Search and momentum in Cloud" computing revenue, but suffered from foreign exchange rates given the strong US dollar.

"We're working to realign resources to fuel our highest growth priorities," Porat said.

Big tech firms are grappling with multiple challenges, from inflation to the war in Ukraine, putting pressure on earnings.

Alphabet recruited throughout the pandemic, but announced a slowdown in hiring as ad revenue growth cooled this year.

"Within this slower headcount growth next year we will continue hiring for critical roles, particularly focused on top engineering and technical talent," Porat said.

Many other tech companies have decided to lay off staff, including Netflix and Twitter, or slow the pace of hiring, such as Microsoft and Snap. 

YouTube squeeze? 

Worsening the financial situation for Alphabet is the fact that Google tends not to aggressively promote advertising on its platform with tactics such as trying to convince businesses that online marketing is a smart move during tough economic times, said independent tech analyst Rob Enderle of Enderle Group.

"They don't like the idea of making their money off advertising, so they don't treat the market very well," Enderle contended.

"Now, you are seeing the adverse impact of not taking your revenue source seriously."

The earnings report also showed that ad revenue at YouTube was slightly lower than it was in the same quarter a year earlier, despite a hot trend of people watching video on-demand on the internet.

"Overall, I feel YouTube remains in a really good position to continue to benefit from the streaming boom," chief business officer Philipp Schindler said during an earnings call.

However, Alphabet noticed a "pullback in spending" by advertisers at YouTube in the quarter, Schindler told analysts.

"They have a ton of competition in video, and TikTok is probably hitting YouTube pretty hard," Enderle said.

Netflix last week reported that it gained subscribers in the recent quarter, calming investor fears that the streaming giant was losing paying customers.

The company said it ended the third quarter with slightly more than 223 million subscribers worldwide, up some 2.4 million, after seeing subscriber ranks ebb during the first half of the year.

The turn-around in subscriber growth comes as Netflix is poised to debut a subscription option subsidized by ads in November across a dozen countries.

Rival streaming platform Disney+ is to launch ad-subsidized subscriptions in December.

Agence France-Presse

YouTube Shorts touts 1.5 billion users, taking on TikTok

YouTube on Wednesday said that more than 1.5 billion people monthly tune into its Shorts video service, which competes with global sensation TikTok.

Alphabet-owned YouTube and Facebook-parent Meta both added short-form video sharing formats to their services after TikTok -- which late last year said it topped a billion users -- became the rage.

YouTube Shorts went live less than two years ago, adding videos of no longer than 60 seconds to the mix of offerings on the platform.

"Shorts has really taken off and are now being watched by over 1.5 billion logged-in users every month," said YouTube chief product officer Neal Mohan.

"We know the product will continue to be an integral part of the YouTube experience moving forward."

YouTube last year launched a $100 million fund to "reward creators" whose video clips attract audiences to the online stage.

YouTube has also put the Silicon Valley tech titan's advertising skills to work helping creators generate income from content on the platform, which brought in billions of dollars in revenue in 2021.

Creators are taking advantage of podcasting, shorts, and live streaming on YouTube in a "multi-platform approach," said vice president of the Americas Tara Walpert Levy.

"This approach is yielding real results; channels uploading both short and long-form content are seeing better overall watch time and subscriber growth than those uploading only one format," Levy said.

She billed YouTube as a one-stop-shop for people to "flex their creative muscles."

TikTok, owned by China-based ByteDance, early this year began letting users upload slightly longer videos, raising the maximum length to 10 minutes from 3 minutes.

YouTube, Meta, and TikTok compete to be the platform of preference from popular online personalities with revenue-making features such as subscriptions or shares in ad revenue.

Agence France-Presse

Alphabet eyes $2 trillion value after blowout results

Google parent company Alphabet Inc advanced nearer to joining peers Apple Inc and Microsoft Corp in the elite $2 trillion market valuation club on Wednesday as the search giant's shares surged more than 8 percent following a blowout quarterly report.

Last trading at about $2,975, Alphabet's stock was on track for its largest one-day percentage gain in almost two years, easing concerns around owning Big Tech following a sector-wide selloff in the past few weeks.

Alphabet's stock market value peaked just above $2 trillion after the start of the trading session, and was last at $1.97 trillion. That includes class B shares that do not trade on the stock market and are held by insiders.

A close above $2 trillion would be the first ever for the Mountain View, California-based company.

"The technology sector started 2022 with some of the biggest question marks over it since the dotcom crash more than two decades ago," said Russ Mould, investment director at AJ Bell. "However, the largest and highest quality US tech names continue to deliver the answers the market wants with big earnings beats."

Shares of Wall Street's most valuable companies have soared in the past two years, driven by pandemic-led shifts in how people work and learn, even as regulators around the world scrutinize them over allegations of breaches of privacy and antitrust concerns.

At least 20 brokerages raised their price targets on Alphabet's stock after the company late on Tuesday delivered record quarterly sales that topped expectations. The median analyst price target is now $3,450, 16 percent above its current price.

Alphabet also announced a 20-to-1 stock split, which will give shareholders 19 shares for every share they hold.

Splitting stocks is a method companies use to woo investors by making them more affordable. However, some brokerages, such as Robinhood Markets, allow investors to buy fractions of shares, making the tactic less effective.

Tesla Inc and Apple split their stocks in 2000 to make their shares more appealing to mom-and-pop investors.

"The split will make the shares more accessible for retail investors and likely facilitate inclusion in the Dow Jones Industrial Average (which is somehow still share price-weighted), but it has no fundamental impact," J.P. Morgan analyst Doug Anmuth said.

Facebook parent Meta Platforms, which is set to report results on Wednesday after the bell, was last up 1.1 percent.

Adding to the rebound in tech stocks, Advanced Micro Devices Inc's shares jumped over 5 percent after its results topped Wall Street expectations. Rivals Nvidia Corp, Qualcomm Inc and Micron Technology Inc also rose.

-reuters-

Google pledges new $10 billion investment in US in 2020

SAN FRANCISCO - Google said Wednesday it would invest more than $10 billion in US offices and data centers in 2020, including its new campus planned for New York City and projects in 10 other states.

The pledge comes on top of some $22 billion invested by the US tech giant unit over the past 2 years.

"These investments will create thousands of jobs -- including roles within Google, construction jobs in data centers and renewable energy facilities, and opportunities in local businesses in surrounding towns and communities," said a blog post by Sundar Pichai, chief executive of Google parent Alphabet.

One of the big projects will be the opening of the Hudson Square campus in New York City, where Google has the capacity to double its workforce by 2028.

Google's investments are spread over all US regions and will include expanded offices in Pittsburgh, Pennsylvania and Cambridge, Massachusetts.

The plans also call for an expanded Google Cloud campus in Seattle, Washington and new locations around San Francisco and Los Angeles. 

The money includes a previously announced $1 billion committed to easing the housing crunch in the Bay Area near Google's Silicon Valley headquarters.

Google cited a study by the Progressive Policy Institute which indicated its parent Alphabet was the largest investor in the United States last year.

Alphabet reported a profit in 2019 of $34 billion on $162 billion in revenues, and added some 20,000 jobs to bring its total workforce to 118,899 at the end of December.

Pichai said Google, which has a presence in 26 states, will focus the new investments on 11: Colorado, Georgia, Massachusetts, Nebraska, New York, Oklahoma, Ohio, Pennsylvania, Texas, Washington and California. 

Agence France-Presse

Google parent Alphabet valuation hit $1 trillion

NEW YORK — Google's parent company Alphabet saw its value reach $1 trillion for the first time Thursday, becoming the fourth US tech company to hit the milestone.

Shares in the online giant rose 0.76 percent for the day to reach the trillion-dollar mark at the close of trade.

The Silicon valley group joins Apple, which first reached $1 trillion in 2018 and on Thursday showed a valuation of some $1.38 trillion; and Microsoft, now valued at some $1.26 trillion.

Another tech titan, Amazon, rose above the trillion-dollar mark in September 2018 but has since declined to a value of around $930 billion.

Google is the leading online search engine and produced the popular Android mobile operating system.

Alphabet, formed as a holding company in 2015, has a number of other units working on "moonshot" projects including Waymo on autonomous cars and Verily for life sciences.

The company announced last year that Google chief executive Sundar Pichai would also assume the CEO functions at Alphabet, raising speculation on whether a fresh reorganization is planned.

Pichai's promotion enabled Google co-founders Larry Page and Sergey Brin to step away from daily operations at the company.

Agence France-Presse

End of an era at Google as founders step aside

SAN FRANCISCO — Larry Page and Sergey Brin, the Stanford graduate students who founded Google over two decades ago, are stepping down from executive roles at Google’s parent company, Alphabet, they announced Tuesday.

Sundar Pichai, Google’s chief executive, will become the chief of both Google and Alphabet.

The move is an end of an era for Google. Page and Brin have personified the company since its founding and have been two of the technology industry’s most influential figures, on a par with the founders of Apple and Microsoft, Steve Jobs and Bill Gates.

Their early work on the Google search engine helped corral an unruly cloud of information on the World Wide Web. And their ideas about how to run an internet company — like offering generous employee perks like free shuttle buses to the office and making rank-and-file employees feel as if they have a stake in the company — became a standard for Silicon Valley.

Page and Brin took a lesser role in day-to-day operations in 2015 when they turned Google into Alphabet, a holding company that includes self-driving car company Waymo under its umbrella.

Since then, they have spent more time overseeing a variety of so-called other bets, like life-extension technology, while Pichai ran Google and its enormous search and advertising business. The business has continued to grow, and Alphabet is among the most valuable companies in the world, but the internet giant is entering one of the most turbulent periods in its history, with antitrust scrutiny, employee walkouts and growing public skepticism of its power.

Page and Brin, who are both 46, will remain directors on Alphabet’s board and the company’s two largest individual shareholders. They retain a majority of the company’s voting shares, which will give them effective control over the board and ensure they still have a say over the company’s future.

“Today, in 2019, if the company was a person, it would be a young adult of 21 and it would be time to leave the roost,” the founders wrote in a public letter Tuesday. “While it has been a tremendous privilege to be deeply involved in the day-to-day management of the company for so long, we believe it’s time to assume the role of proud parents — offering advice and love, but not daily nagging!”

The move confirms the ascendancy of Pichai, 47, as one of tech’s most powerful people. While he has run the core Google business for four years, he has still reported to Page, Alphabet’s chief executive, and Brin, its president.

Now he is the sole executive in charge of a company that has giant businesses in search, advertising, maps, smartphone software and online video, as well as a variety of fledgling bets in far-off areas like drone deliveries and internet-beaming balloons.

In recent years, Page and Brin seemed to have lost interest in running the company they founded. The reorganization into a holding company was in part intended to address that. While Pichai took the reins of the often messy business of Google, Page and Brin would focus on what were effectively science projects.

Brin moved his desk for a time to X, the so-called moonshot lab where engineers worked on projects that were likely to fail — but had big potential if they didn’t. Page was rarely a presence on Google’s campus and was working on long-shot technology problems and personal side projects like his flying-car startup, Kitty Hawk.

They have largely disappeared from public view, at least as company representatives. Despite being the chief of one of the world’s most valuable public companies, Page did not speak on Alphabet’s quarterly earnings calls, appear for congressional testimony like other tech executives over the last year or sit for interviews with journalists.

One of Brin’s few on-the-record comments to journalists in recent years came at San Francisco International Airport when he was protesting President Donald Trump’s immigration policy. He told reporters he was there as a private citizen.

While Page and Brin had been a regular presence at weekly all-staff meetings in Google’s early years, they had all but stopped appearing over the last year.

One of Page’s last appearances at the company meeting was last year when he apologized to employees for his handling of the departure of Andy Rubin, a former senior executive who received a $90 million payout after the company deemed sexual harassment claims against him credible. In June, Page surprised investors and employees when he did not attend Alphabet’s shareholder meeting.

In recent years, the freewheeling work culture promoted by Page and Brin has run into trouble. Employees have staged public protests over the company’s handling of sexual harassment claims against executives, its treatment of contract workers and its work with the Defense Department, federal border agencies and the Chinese government.

The soft-spoken Pichai has been reluctant to confront the protests head-on, but he has quietly cracked down on employee unrest. Google has halted the weekly company meetings and placed restrictions on what employees can discuss on message boards.

Though working at Google is becoming more like working at other giant companies, Page and Brin’s interests and styles — like focusing on passion projects and math jokes — have become part of Silicon Valley iconography.

While other tech titans like Jobs and Gates were known for their sometimes brash and mercurial leadership styles, Page and Brin were low-key and cerebral. But not always. Brin sky-dived for a company event that introduced one of the company’s most disappointing products, the Google Glass wearable device. He was often spotted riding an elliptical bike to work.

That idiosyncratic style, that “Googliness,” became something company managers were told to look for in applicants.

Page and Brin are among the few tech company founders who have walked away from day-to-day roles at the company they created and that made them billionaires. Gates did something similar when he handed the chief executive role at Microsoft to Steve Ballmer in 2000, during his company’s long antitrust fight with the Justice Department.

While Google is now gearing up for its own antitrust fight, with investigations into its power in Congress, the Justice Department and nearly every state, there are notable differences with Microsoft.

When Ballmer took over as chief executive there in 2000, the company had just been found to have repeatedly violated the nation’s antitrust laws in a landmark case brought by the Justice Department. Pichai is still unsure what he faces from regulators and lawmakers. The scrutiny includes Google’s dominant market share in internet search and how it competes with smaller rivals in the digital-ad business.

“For Google, it is still to be determined just what it is facing on the antitrust front,” said David Readerman, a longtime technology analyst and portfolio manager at Endurance Capital Partners. “But that is a clear and present risk.”

In their letter Tuesday, Page and Brin said they would remain committed to the company “for the long term, and will remain actively involved as board members, shareholders and co-founders. In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!”

Whatever they decide to do, they will have no trouble funding it. Page is worth about $58.9 billion, and Brin is worth about $56.8 billion, the sixth- and seventh-richest people in the world, according to Forbes.


2019 The New York Times Company

source: news.abs-cbn.com

Google's Sundar Pichai named CEO at parent firm Alphabet

SAN FRANCISCO - Google chief executive Sundar Pichai will assume the CEO role at parent firm Alphabet in a shakeup at the top of the Silicon Valley titan, the company said Tuesday.

Pichai will take over from Larry Page, a co-founder of the internet giant, at the holding firm which includes Google as well as units focusing on "other bets" in areas including self-driving cars and life sciences.

Page and Google co-founder Sergey Brin "will continue their involvement as co-founders, shareholders and members of Alphabet's board of directors," the company said.

In a letter to employees, Page and Brin wrote: "We've never been ones to hold on to management roles when we think there's a better way to run the company."

They added that Pichai "brings humility and a deep passion for technology to our users, partners and our employees every day" and that there is "no better person to lead Google and Alphabet into the future."

Alphabet was formed in 2015, giving a separate identity to the original company Google and other projects such as autonomous car unit Waymo and smart cities group Sidewalk Labs.

The 47-year-old Pichai, born in India, takes the helm at a time when Page and Brin have been noticeably absent and the company faces a torrent of controversies relating to its dominant position in the tech world.

Pichai is likely to fill a void at the company as it faces antitrust investigations and controversies over privacy and data practices in the United States and elsewhere. 

The company has also faced allegations of failing to adequately address sexual harassment in the workplace and of straying from the ideals espoused by the founders in the company's early code of conduct which included the motto "don't be evil."

"He's a technologist but he's been a steady hand for the last few years and has proven his ability to conduit business at the highest level," said Roger Kay, analyst at Endpoint Technologies Associates.

Kay added the move "ratifies that the (Google) founders have stepped aside almost entirely."

Pichai will have a new role as he faces up to claims from President Donald Trump of "bias" in internet search results, and the latest charge from Amnesty International that its business model leads to human rights violations by enabling surveillance of users.

Earlier this year, Pichai met with Trump and appeared to ease the US president's concerns that Google was unwilling to help the US military but was boosting China and its military.

Trump tweeted after the March meeting that Pichai was "totally committed" to US security.

Last December, Pichai kept calm as he parried US lawmakers over complaints of political bias and intrusive data collection.

"We build our products in a neutral way," Pichai said in one exchange with a lawmaker, and added later: "We approach our work without any political bias."

- Chennai to Silicon Valley -

Born to humble beginnings in the southern city of Chennai, he studied engineering at the Indian Institute of Technology (IIT) in Kharagpur before heading to the United States to further his studies and career.

After leaving India, he attended Stanford University and later studied at the Wharton School at the University of Pennsylvania.

In recent years, Alphabet has become one of the world's most valuable companies, with a 2018 profit of some $30 billion on revenue of $110 billion.

The 2015 reorganization appeared aimed at installing the startup mentality for new ventures, described by Google as "moonshots."

These ventures, including the life sciences group Verily and the biotech operation Calico, have been losing money.

Kay said the "other bets" have been struggling because even though they have the financial backing from Google's profits "they don't have the do-or-die element" of other startups.

juj-rl/bfm

Agence France-Presse

EU antitrust regulators probes Google's data collection

BRUSSELS - EU antitrust regulators are investigating Google's collection of data, the European Commission told Reuters on Saturday, suggesting the world's most popular internet search engine remains in its sights despite record fines in recent years.

Competition enforcers on both sides of the Atlantic are now looking into how dominant tech companies use and monetize data.

The EU executive said it was seeking information on how and why Alphabet unit Google is collecting data, confirming a Reuters story on Friday.

"The Commission has sent out questionnaires as part of a preliminary investigation into Google's practices relating to Google's collection and use of data. The preliminary investigation is ongoing," the EU regulator told Reuters in an email.

A document seen by Reuters shows the EU's focus is on data related to local search services, online advertising, online ad targeting services, login services, web browsers and others.

European Competition Commissioner Margrethe Vestager has handed down fines totaling more than 8 billion euros to Google in the last two years and ordered it to change its business practices.

Google has said it uses data to better its services and that users can manage, delete and transfer their data at any time. 

source: news.abs-cbn.com

Google taps fitness tracker market with $2.1-B bid for Fitbit

Alphabet Inc.-owned Google will buy Fitbit Inc for $2.1 billion, as the biggest Web search company looks to take on Apple and Samsung in the crowded market for fitness trackers and smart watches.

Google said on Friday that it sees an opportunity to introduce its own wearable devices and invest more in digital health. The purchase will also bring a rich trove of health data gathered by millions of Fitbit's devices.

Fitbit's fitness trackers and other devices monitor users' daily steps, calories burned and distance traveled. They also measure floors climbed, sleep duration and quality, and heart rate.

Fitbit's share of the fitness tracking market has been threatened by deeper-pocketed companies such as Apple Inc. and Samsung Electronics Co. Ltd., as well as cheaper offerings from China's Huawei Technologies Co Ltd and Xiaomi Corp.

"We believe Google is a natural fit. The deep health and fitness data, coupled with the 28 million active users on the Fitbit platform, offer a tremendous value," Craig Hallum analysts wrote in a note. Xiaomi dominates the global wearables market, with a 17.3% market share in the second quarter of 2019, followed by Apple. Fitbit owns 10% of the market, according to data from market research firm International Data Corp.

Reuters first reported the deal on Monday.

HEALTH DATA

Fitbit, which helped pioneer the wearable devices craze, has been partnering with health insurers and has been making tuck-in acquisitions in the healthcare market, as part of efforts to diversify its revenue stream. Analysts have said that much of the company's value may now lie in its health data.

U.S. antitrust regulators have little reason to oppose Alphabet's plans to buy Fitbit, but that does not mean that U.S. officials, backed by a bevy of anti-Google lawmakers, will not give the proposed purchase extra scrutiny.

Google is already under antitrust investigation by the Justice Department, the U.S. House of Representatives Judiciary Committee and dozens of state attorneys general for allegedly using its massive market power to crush smaller competitors.

Fitbit has raised privacy concerns in the past: In 2011, the sexual activity of people using the health and fitness tracker was found to be publicly accessible online.

The company said on Friday that its users' health and wellness data would not be used for Google ads. Google said in a blog post that it would give Fitbit users the choice to review, move or delete their data.

Google, which has been defending its privacy practices after a number of regulatory probes, said it would be transparent about the data it collects for its devices and would not sell that data.

Fitbit brings to the deal partnerships it has struck with some large drug companies. In October, Fitbit announced a collaboration with Bristol-Myers Co and Pfizer Inc on early detection of irregular heartbeat, or atrial fibrillation, on its devices.

Fitbit in August also launched its latest smart watch, Versa 2, adding Amazon.com Inc's voice assistant Alexa, online payments and music storage to the device's capabilities.

Fitbit has been offered $7.35 per share in cash, the company said, a premium of about 19% to the stock's closing price on Thursday. The company's shares were trading up 15% at $7.11. Shares of Alphabet were nearly flat at $1,263.18.

The company's shares have gained more than 40% since Reuters reported on Monday that Google had made an offer for Fitbit.

Qatalyst Partners LLP was financial adviser to Fitbit on the deal, which is expected to close in 2020. Fenwick & West LLP was the legal adviser.

(Reporting by Noor Zainab Hussain and Akanksha Rana in Bengaluru; Editing by Anil D'Silva and Jonathan Oatis)

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Google wants safeguards for information in antitrust fight

SEATTLE — Google fired its opening salvo in what is expected to be a protracted antitrust fight with four dozen states, demanding more protections before it hands over confidential business documents sought by investigators.

In a petition filed Thursday in Texas state court of Travis County, Google, along with its parent company Alphabet, sought a protective order against Ken Paxton, the attorney general of Texas, who is spearheading the multistate antitrust investigation into the company.

The petition said Paxton had not provided sufficient safeguards for how his office shares Google’s sensitive business documents with outside consultants to the investigation. Google said some of those outside consultants were also working for competitors or complainants.

It is first legal challenge made by Google since the attorneys general from 48 states as well as the District of Columbia and Puerto Rico said in September that they were starting an antitrust investigation into the market power and corporate behavior of Google, with Paxton taking the lead.

On the same day it announced the investigation, Paxton’s office served Google with a civil investigative demand, seeking what the company called “highly proprietary, competitively sensitive, and otherwise confidential business information” including internal planning memos, strategic documents and white papers. Google has until Nov. 9 to start producing documents related to the 233 requests made by the office.

“Given the breadth of confidential business information sought by the (attorney general’s office) and the heightened risks of leaks and disclosure to Google’s competitors and complainants in this and other regulatory proceedings, a protective order is appropriate and necessary,” Google wrote.

Google’s petition is largely a procedural move, but it offers insight both into who is helping the attorneys general and what Google is worried about as it enters what could be a long legal tussle. In addition to the state inquiries, House and Senate committees, the Justice Department and the Federal Trade Commission are also looking into the company’s business practices.

In a statement, the Texas attorney general’s office said it was caught off-guard by Google’s petition “challenging our right to employ many of the most knowledgeable in this complex field.” It said it had been working with Google to discuss “appropriate confidentiality provisions” to ensure that the information would not be used by the company’s competitors, but what Google wanted would compromise the investigation.

“Google’s petition is nothing more than an effort to hamstring the investigation. But Google is not entitled to choose the states’ expert or run the states’ investigation,” Marc Rylander, communications director for Paxton, said in a statement.

Google said it wanted to be notified in advance before the attorney general’s office shared its confidential company information with third parties such as consultants and sought limits on the ability of outside consultants with access to those documents from working with Google’s competitors.

Google also asked for a “cooling-off” period to prevent consultants from jumping into another job advising competitors based on what it learned during the course of the investigation.

Google pointed to the background of two of the three consultants to the investigation as particularly worrisome. One had served as a consultant to companies that have been vocal in their criticism of Google, including News Corp. and the Russian search engine Yandex. The other, a former lawyer for Microsoft, had also represented clients in other antitrust and other cases against Google.

“This is an extraordinarily irregular arrangement and it’s only fair to have assurances that our confidential business information won’t be shared with competitors or vocal complainants,” said Jose Castaneda, a Google spokesman.

It is not unusual for government investigations to coordinate antitrust arguments with competitors of the company it is investigating. This also happened in the monopoly case against Microsoft in the 1990s.

“This looks like a sideshow,” said David Segal, executive director at Demand Progress, an activist group focused on issues of corporate power and internet freedom. He called Google’s actions “standard delay and deflect tactics by which one of the most powerful corporations in the history of the world” was trying to avoid scrutiny.


2019 The New York Times Company

source: news.abs-cbn.com

Alphabet third-quarter profit misses estimates

Alphabet Inc fell short of analysts' estimates for third-quarter profit on Monday, hit by aggressive spending by its Google unit on marketing and hardware development.

The company reported a net income of $7.07 billion, or $10.12 per Class A and B common share and Class C capital share, in the 3 months ended Sept. 30, from $9.19 billion, or $13.06 per share, a year earlier.

Revenue jumped 20 percent to $40.5 billion.

Analysts on average had expected revenue of $40.33 billion and earnings of $12.44 per share, according to IBES data from Refinitiv.

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Google pledges carbon-neutral shipping, recycled plastic for all devices

SAN FRANCISCO -- Alphabet Inc's Google on Monday announced that it would neutralize carbon emissions from delivering consumer hardware by next year and include recycled plastic in each of its products by 2022.

The new commitments step up the competition among tech companies aiming to show consumers and governments that they are curbing the environmental toll from their widening arrays of gadgets.

Anna Meegan, head of sustainability for Google's devices and services unit, said in an interview that the company's transport-related carbon emissions per unit fell 40 percent last year compared to 2017 by relying more on ships instead of planes to move phones, speakers, laptops and other gadgets from factories to customers across the world.

The company will offset remaining emissions by purchasing carbon credits, Meegan said.

Three out of nine Google products for which the company has detailed disclosures online contain recycled plastic, ranging from 20 percent to 42 percent in the casings for its Google Home speakers and Chromecast streaming dongles.

In a blog post, Google committed to introducing some recycled plastic to 100 percent of products by 2022.

Meegan acknowledged that Google's 3-year-old hardware business trails far larger hardware rival Apple Inc in some sustainability efforts.

Apple, which in 2017 committed to "one day" only using recycled and renewable materials, has at least 50 percent recycled plastic in some parts of several products, recycled tin in at least 11 products and recycled aluminum in at least two.

But sustainability standards are now a part of Google's hardware planning, Meegan said. Devices cannot clear the second checkpoint in the company's design process unless they show that sustainable packaging and materials and ease of repair have been considered.

"We are fundamentally looking to build sustainability into everything we do," she said. "It's going to take us time to demonstrate progress."

source: news.abs-cbn.com

Apple, Google pause review of audio recordings from voice assistants

Apple Inc. and Alphabet Inc.'s Google have globally suspended reviewing recordings from users interacting with their voice assistants, as concerns over data privacy mount.

Apple said on Friday it had paused the program called "grading," where it reviewed anonymized recordings of conversations people had with its Siri voice assistant.

The decision comes after the Guardian last week reported that the company's contractors tasked with reviewing the recordings regularly heard confidential information and private conversations.

Increased public and political scrutiny of data privacy practices have forced greater transparency from Silicon Valley companies, with Google pausing reviews of audio recordings from its Google assistant service for all purposes in all languages, after a leak of Dutch audio data.

Proposals being weighed by lawmakers in the United States and elsewhere would limit how internet companies track and distribute consumer information as voice assistants such as Siri and Amazon.com Inc's Alexa become a bigger part of people's everyday lives.

"While we conduct a thorough review, we are suspending Siri grading globally," an Apple spokesperson said in a statement, adding that users would be able to opt out of the program in a future software update.

Contractors graded Siri's answers to user queries as part of efforts to perform quality checks, the Guardian reported. They also looked at whether the response was triggered accidentally, the newspaper said.

Users can turn off storing audio data to their Google account completely, or choose to auto-delete data after every 3 months or 18 months, a Google spokesperson told Reuters.

Amazon also said it allows users to opt-out of having their voice recordings used to help develop new Alexa features.

The company will update the information provided to customers to make the practices more clear, an Amazon spokesperson said in an emailed statement.

Microsoft Corp. did not immediately respond to a request for comment on the status of reviews from its Cortana voice assistant.

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Alphabet, Starbucks drive Wall Street to record high

Robust earnings from Alphabet and Starbucks pushed the S&P 500 and Nasdaq indexes to record highs on Friday, with support from data showing US economic growth slowed less than expected in the second quarter.

The US Commerce Department said GDP increased at an annualized rate of 2.1 percent in the second quarter, higher than a 1.8 percent rate forecast by economists polled by Reuters.

The GDP data further solidified wide expectations that the US Federal Reserve will cut interest rates at its policy meeting next week. Those expectations have powered a solid run in stocks this month, helping Wall Street scale record levels.

"This is just what the market needed, not so soft that the economy is slowing down precipitously and not so strong that the Fed is going to reverse course," said Art Hogan, chief market strategist at National Securities in New York. "It shows that the economy is slowing, but not nearly enough to raise any red flags."

The data comes on the heels of European Central Bank President Mario Draghi's speech on Monday, which was less dovish than investors had anticipated and led the S&P 500 to post its first loss in the week.

Two weeks into the second-quarter earnings season, about 75 percent of the 218 S&P 500 companies that have reported so far have topped profit estimates, according to Refinitiv data.

Starbucks rallied 8.9 percent to a record high after the world's largest coffee chain posted its biggest same-store sales growth in three years.

Alphabet Inc. surged 9.6 percent after beating Wall Street targets on higher ad sales and growth at its cloud unit, a high-margin business it is leaning more on to drive expansion.

Twitter Inc. rose 8.9 percent after it posted better-than-expected quarterly revenue and an uptick in daily users who see advertisements on the site.

Their upbeat earnings pushed the S&P 500 communication services index up 3.25 percent, the most among S&P sectors.

Lead negotiators for China and the United States are set to meet in Shanghai on Tuesday for 2 days in the next round of talks aimed at settling the US-China trade war. The results of those talks will affect sentiment on Wall Street.

"Going forward, it's very important not to have a breakdown in trade talks. And earnings reports need to continue to come in as they have been - a little better than expectations," said Tom Martin, a senior portfolio manager at GlobAlt Investments in Atlanta.

The Dow Jones Industrial Average rose 0.19 percent to end the week at 27,192.45 points, while the S&P 500 gained 0.74 percent to 3,025.86. The Nasdaq Composite added 1.11 percent to 8,330.21.

For the week, the S&P 500 added 1.7 percent, the Nasdaq climbed 2.3 percent and the Dow rose 0.1 percent.

Even under the cloud of uncertainty related to trade conflict, the S&P 500 has risen 21 percent so far in 2019.

Also on Friday, McDonald's Corp. jumped as much as 2.1 percent, briefly hitting a record high after beating quarterly sales expectations at established US restaurants.

Amazon.com Inc. fell 1.6 percent and was the biggest drag on the benchmark S&P 500 after the online retailer reported its first profit miss in 2 years and said income would slump in the current quarter.

Intel Corp. lost 1.1 percent, even after the chipmaker gave an upbeat current-quarter forecast and raised its full-year revenue guidance.

Advancing issues outnumbered declining ones on the NYSE by a 2.04-to-1 ratio; on Nasdaq, a 2.34-to-1 ratio favored advancers.

The S&P 500 posted 41 new 52-week highs and two new lows; the Nasdaq Composite recorded 111 new highs and 79 new lows.

Volume on U.S. exchanges was 5.9 billion shares, compared with the 6.3 billion-share average for the full session over the last 20 trading days.

source: news.abs-cbn.com

Google/Alphabet sees fresh growth amid antitrust woes

SAN FRANCISCO - Google parent Alphabet's stock price leaped Thursday after reporting stronger-than-expected results in a quarterly update coming amid growing scrutiny of technology firms by antitrust regulators.

The internet giant said profits tripled in the second quarter from a year earlier to $9.9 billion while revenues increased 19 percent to $38.9 billion.

Shares in Alphabet rallied some 9 percent in after-hours trade on the report, which appeared to ease fears about slowing growth.

Also helping shares was an announcement that the company would spend an additional $25 billion on stock buybacks.

Profits were sharply higher than the same period last year when Google was forced to pay a $5 billion fine to settle antitrust actions in the European Union.

The strong results come with Google expected to face tough scrutiny in the United States where antitrust regulators have begun a review on online platforms over competition concerns.

Google chief executive Sundar Pichai told analysts that "we understand there will be scrutiny" and that "we will engage constructively."

He added: "It's not new to us. We have participated in these processes before. And to the extent there are concerns we'll address them as well."

Google has denied abusing its position and an executive told lawmakers at an antitrust hearing this month that the company has "helped reduce prices and expand choice for consumers and merchants in the US and around the world."

ADS AND MORE ADS

Google accounted for the lion's share of revenue and profits for the company with "other bets" -- including Alphabet's autonomous driving division Waymo and its life sciences and cybersecurity units -- bringing in a modest $162 million in revenue and posting an operating loss of $989 million.

Alphabet chief financial officer Ruth Porat said the results showed "we're delivering strong growth."

Google's digital ad revenues rose 16 percent from a year ago and accounted for $32 billion of the company's revenues.

Google is the dominant player in internet search and as a result holds an estimated 31 percent share of digital advertising, according to the research firm eMarketer.

Its power has attracted scrutiny from antitrust regulators in Europe and more recently in the United States, where some lawmakers and candidates have called for a breakup of major tech firms.

Google has been seeking to diversify its revenue base with more hardware offerings including smartphones and digital assistants and a new streaming game service called Stadia.

source: news.abs-cbn.com

How big is YouTube? It’s still anyone’s guess

YouTube probably generates $16 billion to $25 billion in annual revenue, making the video service big enough to crack the top half of the Fortune 500.

But that is just a guess. Even though financial analysts on Wall Street think YouTube makes about as much money as the Gap, General Mills or Netflix, the video service’s financial results are a secret. They are lumped in with the rest of Google, an even larger internet company that last year generated $137 billion in revenue.




That secrecy has led to growing frustration among analysts and investors, who will be looking for more details about YouTube when Google’s parent company, Alphabet, reports results for its second financial quarter on Thursday. Three months ago, Alphabet executives pointed to issues with YouTube as a factor in disappointing financial results in the first quarter.

“I think their reticence to provide information borders on paranoia, as if they would be admitting failure if they allowed us to discover whether one of their businesses was performing more poorly than expected,” said Michael Pachter, an analyst at Wedbush Securities.

Big tech companies have been under pressure from regulators and lawmakers to provide more insight into how their businesses operate. The lack of disclosure around YouTube’s finances is a reminder that some of them have actually made understanding how they make money more difficult over the last year.

In November, Apple announced it would stop disclosing iPhone sales figures. The company had been providing that data for a decade. But now that iPhone sales are slowing, Apple argues that they are no longer representative of the strength of the company’s overall business.


In July, when Facebook reported slower than expected growth in users for its main service, the company’s chief executive, Mark Zuckerberg, disclosed a new, more positive metric: 2.5 billion people used at least one of the company’s apps — Facebook, Instagram, WhatsApp or Messenger — in June.

The obfuscation of information that investors want more of has become a “foundational practice” by tech companies, said Gene Munster, a managing partner at Loup Ventures, a venture capital firm, who was a financial analyst for 20 years. “Companies change the disclosures to change the narrative and make it more difficult to get to the things investors want to know.”

When it reports financial results, Alphabet groups YouTube with other Google properties like search, the Google Play app store and Gmail. Analysts who follow the company say putting everything under Google makes it hard to parse out the performance of YouTube, especially because search remains the biggest business at the company.

YouTube does not disclose revenue, profitability, how many ads it runs alongside videos, user numbers and how often those users visit the site — all metrics that would help an investor “understand the health of the business and its growth trajectory,” said Pachter.

“I don’t think the company provides anything that helps us understand the business,” he said.

More details around YouTube’s business may confirm that it does not compare favorably to Facebook in key metrics for gauging its popularity, such as how long users stay on the site and how frequently they visit, Pachter said.

An Alphabet spokeswoman, Winnie King, declined to comment.

When Alphabet last reported quarterly earnings in April, the company stunned investors as revenue came in $1 billion below Wall Street expectations.

In response to a question from a financial analyst about the company’s first-quarter shortfall, Ruth Porat, Alphabet’s chief financial officer, said growth in clicks for YouTube ads had “decelerated” because of tighter restrictions in early 2018 on what videos could carry advertising. Porat said YouTube had made “important” and “strong” contributions to revenue, but was not more specific.

When Sundar Pichai, Google’s chief executive, spoke about YouTube in the call, he announced new features or policy changes that for the most part had already announced. The new information he did reveal — such as viewership of Super Bowl commercials was up 60 percent on YouTube — was a narrow sliver of YouTube’s business.

Companies in the United States have significant leeway in determining what information is considered “material” and has to be disclosed in financial results reported to regulators.

In 1976, the Supreme Court in TSC Industries v. Northway established the definition of material as information that would have been considered important to a reasonable investor. The definition, however, was vague, and companies have generally been allowed to make their own decisions about what would be important to a reasonable investor.

When big tech companies have offered more insight into their far-flung operations, it has been well received by Wall Street.

When Amazon disclosed revenue and profit for its high-margin Amazon Web Services unit in 2015, it eased concerns about the company’s ability to turn a profit.

Last year, Google surprised analysts on an earnings call by announcing that its Google Cloud business had surpassed $1 billion in quarterly revenue. At the time, Google had been fighting the perception that its cloud business was struggling to make inroads against AWS and Microsoft’s cloud-computing competitor, Azure.

“Companies usually pull back disclosure when items turned negative, and then they try to offset with more positive disclosure,” said Mark Mahaney, an analyst at RBC Capital Markets who follows Alphabet and other internet companies.

He said he did not expect Alphabet to change its disclosure for YouTube anytime soon. But Mahaney said — frustration aside — that he did not believe more detail about YouTube’s business would alter investors’ perception of Alphabet.

Investors generally see YouTube accounting for about 20 percent of Google’s revenue. There are more questions around YouTube’s profitability, but he said the general view was that it was “modestly profitable but not dramatically so.”

Starting in July 2017, the Securities and Exchange Commission sent three letters to Alphabet asking, among other things, for an explanation on why it does not need to break out YouTube from Google.

In its response, Alphabet said that since Larry Page, its chief executive, did not receive weekly updates on how YouTube’s business performed to assess the performance of Google, the disclosure requirement was “not applicable.”

Alphabet also said detailing its advertising revenue by different product areas was unnecessary because its goal was to sell one product — online advertising — regardless of how a customer paid for it or where that ad appeared.

In January 2018, the SEC said it completed its review with no further action.

Marcia Narine Weldon, a lecturer in law at the University of Miami who specializes in compliance and corporate governance, said the arguments made by Alphabet to the SEC for not disclosing YouTube separately “don’t hold water.”

“I’m surprised that the SEC hasn’t pressed it more,” said Narine Weldon. “It’s a legitimate question for shareholders given the size of the business.”


2019 New York Times News Service

Big Tech execs due on Capitol Hill for antitrust hearing

WASHINGTON -- Executives from Amazon.com Inc, Apple Inc, Facebook Inc and Alphabet's Google will testify before a House of Representatives congressional committee next week in a hearing to discuss the tremendous market power wielded by online platforms.

In a statement on Tuesday, the House Judiciary Committee's antitrust subcommittee said witnesses would include: Adam Cohen, director of economic policy at Google; Nate Sutton, associate general counsel for regulation at Amazon; Facebook's Matt Perault, head of global policy development and Apple vice president for corporate law Kyle Andeer.

The hearing will be held on Tuesday, July 16, the advisory said.

Apple and Google did not respond to a request for comment. Facebook had no immediate comment. Amazon spokeswoman Jodi Seth said they will testify, but did not share details.

Separately, a subcommittee of the Senate judiciary panel said in a notice on Tuesday that it had also scheduled a hearing for July 16. It was not immediately clear who would attend.

The hearings come as the House Judiciary Committee is probing competition in digital markets as part of an investigation announced last month, with both Republicans and Democrats expressing concern about the power exercised by several of the world's most valuable companies.

The executive branch has antitrust probes underway with the Justice Department looking at Google and Apple while the FTC probes Facebook and Amazon.

The hearing also comes at a time when both Republicans and Democrats have expressed exasperation with the big tech giants, but for different reasons.

Conservatives, including US President Donald Trump, have complained that social media companies try to diminish their voices online.

Meanwhile, progressives like presidential candidate Elizabeth Warren have called for Amazon, Google and Facebook to sell companies that they purchased previously as a way to address competition concerns.

Furthermore, Facebook is expected to pay a $5 billion penalty for its work with a consultancy firm Cambridge Analytica, which obtained data from millions of Facebook users without their permission. Cambridge was hired by President Donald Trump for his 2016 US presidential election campaign.

Social media and technology executives have been called to testify before lawmakers in high-profile hearings on various subjects over the past two years, including on foreign influence operations on their platforms. 

source: news.abs-cbn.com

YouTube touts first new original program under free strategy

NEW YORK/SAN FRANCISCO - Alphabet Inc's YouTube unveiled on Thursday nine new original programs that will be available for free this year as the streaming service shrinks an effort to attract subscribers with content exclusively behind a paywall.

The unveiling at a YouTube event for advertisers and media in New York offered the first glimpse at how the shift announced in November away from subscriber-only content will play out across the world.

Programming has turned out to be less of a draw for YouTube Premium subscribers than ad-free viewing and other perks, while YouTube has faced pressure from advertisers to increase its supply of television-like content that is suitable for sponsorship.

New programs include a documentary about Dude Perfect, a group that performs sports tricks on YouTube, and an interactive series featuring YouTube star Mark Fischbach that lets viewers control the storyline.

Also on tap are an investigation show from media startup Vox and a set of standalone films from The School of Life channel on YouTube that "explore some of the greatest philosophical questions of our age," YouTube said.

More programs are expected to be announced later this year, including an international slate. As YouTube seeks to broaden its audience for original programming, it plans to direct half of its development budget to programs aimed at viewers outside the United States, according to a person familiar with the matter.

YouTube said its overall spending on programming remains consistent with past years.

Alphabet does not break out financial results for YouTube, which is part of Google, but financial analysts expressed concern this week that advertiser scrutiny of user-generated inappropriate or offensive content on YouTube could be among reasons for a slowdown in revenue growth at Google.

Ads are YouTube's core business, and executives said Thursday they wanted to align the original content arm with the overall business.

“While every other media company is building a paywall, we are headed in the opposite direction," YouTube's chief business officer, Robert Kyncl, said in a statement.

YouTube said it is still testing content-related benefits for subscribers. For instance, all episodes from the next season of its popular show "Cobra Kai," which is based on the Karate Kid movie franchise, will be available to subscribers when it launches. Non-subscribers will gain access to one new episode per week, similar to the rollout of shows on traditional television.

New episodes of a handful of existing programs are likely to remain subscriber-only because of prior commitments, YouTube said.

GLOBAL FOCUS

YouTube showcased only one international program on Thursday, a documentary due in June on Latin American pop star Maluma.

YouTube streamed about a dozen original shows and movies over the last year that were aimed internationally where it saw a big opportunity to get subscribers, including in France, Germany, India, South Korea and Japan.

YouTube has shifted gears several times on original programming since making it a focus in 2011. Among debates have been whether ad sales alone could be enough to generate a return on investment, especially for expensive scripted shows.

Overall, YouTube has debuted about 75 shows and 28 films under its previous strategy, which was launched in 2016, according to a Reuters tally. Thirteen of those shows so far went onto multiple seasons.

Though some shows drew significant viewership to free samples, they were not renewed because they struggled to convert users into subscribers, according to content makers.

YouTube declined to comment on the figures or evaluation process.

The streaming service also announced 2 projects scheduled for next year featuring global stars: A documentary on model Paris Hilton and a secret project with singer Justin Bieber. 

source: news.abs-cbn.com

End of an era at Google as ex-CEO Schmidt plans to leave board

SAN FRANCISCO — Google’s parent company, Alphabet, said Tuesday that Eric Schmidt, its former chief executive, planned to relinquish his position on the board of directors in June.

His departure will end an era for the internet giant, in a shake-up of one of the coziest and most stable corporate boards in Silicon Valley. Another member, Diane Greene, who gained her seat in 2012 and had been running Google’s cloud computing business until this year, will also not seek re-election.

Schmidt, who was Google’s chief executive for a decade until 2011 and then its executive chairman for 7 years, oversaw the meteoric rise of Google from a useful search engine into an internet powerhouse.

He was brought into the company in 2001 to provide oversight for its young founders, Larry Page and Sergey Brin. He helped take Google public and oversaw major acquisitions like YouTube and DoubleClick, which cemented Google as an industry giant.

Schmidt stepped down as executive chairman of Alphabet in January 2018, but kept his board seat. He will not seek re-election when his term expires in June, Alphabet said. On Twitter, Schmidt said he would remain a technical adviser to Alphabet and Google.

Alphabet said it had appointed to the board Robin L. Washington, an executive vice president and chief financial officer of Gilead Sciences, a biopharmaceuticals company. Before the announced changes, seven of Alphabet’s 11 directors had been on the board for more than a decade.

The board has come under scrutiny because of a shareholder lawsuit filed in January that said directors had neglected their fiduciary duties by approving massive exit packages for executives accused of misconduct.

The lawsuit, citing minutes and emails, said board members had rubber-stamped compensation agreements hammered out by Page, Alphabet’s chief executive, who along with Brin owns voting control of the company.


2019 New York Times News Service

source: news.abs-cbn.com