Displaying items by tag: Sundar Pichai
The US Justice Department has filed (yet another) antitrust lawsuit against Internet behemoth Google and it could have major repercussions for Apple. It is estimated that Google pays Apple between $8 billion to $12 billion a year to be the default search engine on Apple’s devices and soon it may all come to a head.
The scrutiny of the deal, which was first agreed 15 years ago and has rarely been discussed by either company, has highlighted the special relationship between Silicon Valley’s two most valuable companies —‘an unlikely union of rivals’ that regulators say is unfairly protecting its monopoly and preventing smaller companies from flourishing.
The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.
The lawsuit describes that the relationship's evolution from Google being the default search engine on Apple's Safari browser in 2005 in exchange for ad revenue to a broader agreement that included iPhones and later Apple's assistant Siri. "Today, Google's distribution agreement with Apple gives Google the coveted, preset default position on all significant search access points for Apple computers and mobile devices," the Justice Department stated.
While the deal is nice for Google - which sees about 50% of its searches originate from Apple devices, it is much more lucrative for Apple considering that the payments are purely profit. This is believed to be the single biggest payment Google makes to anyone, and it is estimated to account for 15 to 20 percent of Apple's annual profits.
"There is a risk, if you play it out, that there actually could be more financial impact to Apple than there is for Google," Toni Sacconaghi, an analyst for Bernstein, told The Wall Street Journal in an article, estimating that Apple stock could decline as much as 20% if the agreement with Google is dissolved.
If we estimate that payments from Google stood at about $10 billion in the fiscal year ‘19 and Apple had to forgo the entire amount, services revenues would be lower by about 22% with total revenues lower by about 4%. The impact on Apple’s profits would be much more evident as it likely incurs no costs to earn these revenues.
However, the Financial Times reported that Apple is stepping up efforts to develop an alternative to Google search. In a small change to the newest model of the iPhone working system, iOS 14, Apple has started to point out its personal search outcomes and hyperlink on to web sites when customers sort queries from its house display.
That internet search functionality marks a necessary advance in Apple’s in-house improvement and provides an alternate if regulators block its profitable partnership with Google. Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department, so the prospect of losing the Apple deal has been described as a “code red” scenario inside the company.
The landmark lawsuit, which follows a 16-month investigation by the House of Representatives' judiciary committee, is a part of a broader regulatory push against big tech. However, it remains unclear which of the Silicon Valley companies will prove more vulnerable to mounting regulatory pressure.
Google’s parent company, Alphabet, reported its fourth-quarter and full-year financial results. The company’s revenue grew from $39.3 billion in 2018 to $46.1 billion in 2019. The firm’s net income also expanded from $8.9 billion to $10.7 billion over the same time frame.
However, the figures, when compared to expectation, were mixed. Alphabet missed revenue expectations in the fourth quarter despite stellar growth at YouTube and in the cloud, earnings figures showed.
Detailing its cloud computing and YouTube revenues for the first time, Alphabet reported that profits rose 19 percent from a year ago in the quarter to nearly $10.7 billion as revenues increased 17 percent to $46 billion.
The company said its cloud computing services took in $2.6 billion in revenue during the last three-month period, up more than 50 percent and nearly $9 billion for the year.
Alphabet and Google chief executive Sundar Pichai touted YouTube as a revenue star at the company, with ad revenue reaching $15 billion last year in an increase of about 36 percent from 2018. YouTube music and television premium services now have more than 20 million paid subscribers, according to Pichai.
Despite assurances by executives that Alphabet sees plenty of money-making potential ahead and is investing to capitalize on long-term trends, Alphabet shares slipped more than four percent in after-market trades that followed release of the earnings figures.
The California tech giant, which dominates online search and makes the Android mobile operating system, has been working to reduce its dependence on the digital advertising which delivers most of its cash.
"Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet," said Pichai.
Chief financial officer Ruth Porat said Alphabet will ramp-up hiring this year. Much of that will be engineering talent for its cloud division which competes with cloud market-leaders Amazon and Microsoft.
"We are leaning into investing for long-term growth," Porat said. "That has been a key principle here and continues to be," she added.
Google advertising took in the majority of revenue at $38 billion in the quarter, and more than 80 percent of its annual revenues of $162 billion. Colin Sebastian, an analyst at Baird, said the earnings report showed "a deceleration" in growth for Google, which may have been due to the impact of fewer holiday shopping days.
Analyst Nicole Perrin at eMarketer said the results highlight the significance of YouTube, the popular video service for which Alphabet had not up to now disclosed financial data.
"This is something investors have been looking for, but the information should also give advertisers valuable information about the importance of YouTube as a digital ad vehicle," Perrin said.
"YouTube is growing strongly according to this report, and revenues are above where eMarketer had thought they were."
Google founders Larry Page and Sergey Brin have announced they are stepping down from top roles at the online giant's parent company, Alphabet.
US technology behemoth Google has announced that it will spend $13bn in expanding its US data centre network.
Fifteen Democratic senators have proposed a new bill for protecting online information.
The Data Care Act creates new rules around how companies handle the data of customers. Data collectors would be required to ‘reasonably secure’ information and to ‘not use individual identifying data in ways that harm users’. It requires data collectors to give adequate notice to consumers about breaches of sensitive information.
If data collectors share or sell data with a third party, it would give the FTC the authority to fine companies that act deceptively.
It is just one of many proposals that members of Congress have put forward to regulate the tech industry. Earlier this year, Sen. Ron Wyden proposed a bill that would send executives who mishandle data to prison.
Privacy activists have welcomed the bill, believing online personal data should be handled in the same regard as bank or medical records. EFF legislative analyst India McKinney said in a statement that the organization will “look forward to working with the Senator to improve his bill and to advance information fiduciary protections that will meet the needs of Internet users and adequately safeguard consumer data privacy as a part of comprehensive privacy legislation.”
The bill comes after Google CEO Sundar Pichai testified before a committee earlier this week. He was questioned on data privacy during a House Judiciary Committee hearing on Monday.
Alphabet Inc., the parent company of Google, announced its financial results for Q3 on Oct. 26, for the quarter ended Sept. 30. The company’s revenues were up 24 percent year-on-year, reflecting strength across Google and other bets. “Our momentum is a result of investments over many years in fantastic people, products and partnerships,” said Ruth Porat, FCO of Alphabet.
The company had a “terrific quarter” said Porat in a conference call with media. Revenues of $27.8 billion were up 24 percent year-on-year, and also up 24 percent in constant currency. Advertizing revenues benefited from strong performance in sites, which was powered by strong results in mobile search.
The company saw growth in network revenues which was led by its programmatic business. Alphabet also benefited from growth in revenues from cloud, play and hardware.
Alphabet’s performance was strong in all regions, Porat said. US revenues were $12.9 billion, up 21 percent year-on-year. Europe, Middle East and Africa revenues were $9.1 billion, up 23 percent year-on-year. Asia Pacific revenues were $4.2 billion, up 29 percent versus 2016. Other Americas revenues were $1.5 billion, up 33 percent year-on-year.
The company’s operating expenses were $8.8 billion, up 11 percent year-on-year, reflecting the change in the timing of its annual equity refresh cycle from the third quarter to the first quarter of each year. Operating income was $7.8 billion, up 35 percent versus 2016, and the operating margin was 28 percent. Other income and expense was $197 million.
Google contributed revenues of $27.5 billion, up 23 percent year-on-year. In terms of the revenue detail, Porat said, Google site revenues were $19.7 billion in Q3, up 23 percent year-on-year, led by mobile search, and complemented by desktop search and strong performance from YouTube.
Meanwhile, Alphabet’s Network revenues were $4.3 billion, up 16 percent year-on-year, reflecting the ongoing momentum of programmatic AdMob, a Google-owned advertizing company. Other revenues for Google were $3.4 billion, up 40 percent year-on-year, fueled by cloud, play and hardware.
Total traffic acquisitions were $5.5 billion or 23 percent of total advertizing revenues and up 32 percent year-on-year. Other Bets revenues – generated by Nest, Fiber and Verily – were $302 million. Operating loss including the impact of SBC was $812 million for Q3.
“Nest continues to drive ongoing product expansion with a number of notable launches including the Nest Thermostat E, which is offered at a lower price point than the Nest Learning Thermostat,” said Porat. “Nest also announced a home security solution that includes the Nest Secure alarm system, Nest Hello video doorbell, the Nest Cam IQ outdoor security camera and corresponding software and services.”
Porat added, “Waymo continues to expand its geographic presence and announced this morning that it will commence winter testing in Michigan to build on our progress to-date addressing the challenge of autonomous driving in cold weather, particularly with snow, sleet and ice. Michigan is the sixth state where Waymo is testing its self-driving vehicles. Over the last eight years, Waymo's cars have self-driven in more than 20 cities.”
Porat also mentioned Project Loon, a research and development project being developed by Alphabet subsidiary X with the mission of providing Internet access to rural and remote areas. Alphabet has been collaborating with companies such as SES and AT&T to deliver emergency Internet service to the hardest hit parts of Puerto Rico.
Google CEO Sundar Pichai said he has been “really proud of the progress this quarter, launching popular new products and continuing to grow our business in new areas. It's been particularly exciting to see our early bet on artificial intelligence pay off and go from a research project to something that can solve new problems for a billion people a day.”
Alphabet Inc., the parent company of Google and YouTube, posted its financial results on July 24 for the quarter ended June 30, 2017. The tech giant reported a 21 percent jump in quarterly revenue, maintaining a strong growth rate despite a massive anti-trust fine from the European Union.
The company said it made $3.5 billion in net income on sales of $26 billion. Alphabet’s profit would have been even larger if not for the record $2.7 billion EU fine. Alphabet was accused of abusing its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.
Anti-trust concerns have not come from the US. If it weren’t for the EU fine, Alphabet said its earnings per share would have been $8.90 in Q2, compared with $7 a year earlier. But with the fine, the company reported earnings per share of $5.01, beating an average estimate of $4.49.
The company will fight to continue bundling its Android operating system with popular smartphone apps such as Google Maps, said Google CEO Sundar Pichai in a conference call – a practice the EU anti-trust officials are investigating.
“It’s a very open market, open ecosystem, and it works well for everyone, and I expect that to continue,” he said, adding that billions of people use Google products worldwide.
"With revenues of $26 billion, up 21 percent versus the second quarter of 2016 and 23 percent on a constant currency basis, we're delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams," said Ruth Porat, CFO of Alphabet.
There are concerns, the company noted, that its costs have been rising faster than sales. Expenses would remain high as more searches shift to mobile devices. The uncertainty of expected profit appeared to weigh down on Alphabet’s share price, said Reuters, which fell about 3 percent to $967 after the bell.
The company’s revenue costs, a measure of how much it needs to spend to keep its platforms running before added costs such as research, rose 28 percent, according to the results, which is higher than the growth in revenue itself. The rising costs, such as Google paying to drive traffic to its search engine, affected the company more than expected, analysts report.
“This could be problematic going forward,” Doug Kass, president of Seabreeze Management, told Reuters.
Alphabet is focused on growing bigger, according to Porat, who was asked about margins during a conference call with analysts. She said, “As we’ve often said, we’re focused on revenue and operating income dollar growth and not on operating margins.”
She further noted that increasing costs are merely the result of more money being invested into high-growth products that she said would create value for Alphabet shareholders. The company currently holds $15.7 billion in cash and cash equivalents, according to the results, and a further $79 billion in marketable securities.
Alphabet competes head-to-head with social media giant Facebook for online advertizing revenue. According to eMarketer, Google is expected to have $73.75 billion in net digital ad revenue worldwide while Facebook is expected to make just $36.29 billion. Together, eMarketer reports, Google and Facebook rake in 49 percent of the market.
Other products under the Alphabet umbrella, such as the Pixel smartphone, the PlayStore and Google’s cloud business, saw revenue increase 42.3 percent to $3.09 billion. Google’s cloud business competes against heavyweights such as Amazon and Microsoft.
Some of Alphabet’s losses came from business units such as Waymo, its self-driving company, and thermostat-maker Nest, and the life sciences firm Verily.
California-based Alphabet, parent company of Google, reported strong profit growth on Thursday, 26 January, for the final three months of 2016. The company saw its profits rise on growth in mobile search and its video-sharing service YouTube. Google remains as Alphabet’s majority operating unit and advertising is still the company’s main source of profit.
According to Alphabet its net income increased eight percent to $5.3 billion, which wasn’t as high as industry predictions on Wall Street, despite better-than-expected revenue. For earnings purposes, Alphabet categorizes operations such as self-driving cars and Nest smart thermostats into an “Other Bets” category, which almost doubled revenue to $262 million in the quarter, but still posted a loss of nearly $1.1 billion.
Alphabet’s revenue in the final quarter of last year reached $26 billion, up 22 percent from the same period the previous year. However, the company’s shares dropped more than two percent to $838 in after-market trade that followed the release of the earnings figures.
Alphabet chief financial officer Ruth Porat said in a release, “Our growth in the fourth quarter was exceptional,” crediting mobile search and YouTube which drove the high performance. “We’re seeing great momentum in Google’s newer investment areas and ongoing strong progress in Other Bets.”
Alphabet, under its new structure, is said to be expanding beyond its role as a search engine that provides advertising linked to queries. The company last year leveled up to its rivals Apple, Samsung and Amazon by pushing into hardware, launching premium-priced, in-house designed artificial intelligence products.
Google also revealed its new "home assistant" which aims to compete with Amazon's Alexa-powered devices as a hub for the smart home, and has been working to become the platform for some connected cars. During an earnings call, Google chief executive Sundar Pichai said he is deeply involved with the company’s push into artificial intelligence, believing there is a lot of potential in digital assistance to make services such as mobile search more helpful to users.
“In the long run, I think we will evolve from a mobile first to an AI first world,” said Pichai. “We are at the forefront and pushing and pushing hard and getting there.” According to Porat, the bulk of the money taken in came from "Other Bets" came from Nest, Verily, and a Fiber unit building super-fast internet lines in select US cities.
It was recently announced that Singapore-based sovereign based fund Temasek will invest $800 million in Verily, the Alphabet subsidiary focused on healthcare. The infusion of cash, for which Temasek will get a minority stake, comes as Verily works to bring some of its creations to market. Verily was known as Google Life Sciences but rebranded after the internet giant became Alphabet in a corporate restructuring.
Verily specializes in applying technology to problems in health and biology. Among the ideas discussed has been building a sickness-sensing diagnostic device along the lines of the "tricorder" seen in "Star Trek" science fiction films and television shows.
Google CEO, Sundar Pichai, says about two million people are using free Wi-Fi provided by Google and RailTel at major railway stations across India every month. “We are working with the Indian Railways and RailTel to bring high-speed wireless access to the entire internet to millions of Indians who travel through India’s top railway stations,” he said.
Google partnered with RailTel, the telecoms part of the Indian Railways, to provide free Wi-Fi at 23 stations across India. Google aims to provide high-speed public Wi-Fi service at 100 railway stations across the country. Mr. Pichai says there are “already two million people logging in every month and they are using as much as 15 times the data they would otherwise use in a full-day on their cellular networks.”
Data from the Government of India, the second most populous country in the world, indicates that the country had a total internet subscriber base of 342.65 million as of March 2016. Using a phone to access internet is the most popular means in India.
Indian-based telecoms provider Bharti Airtel has 90.53 million internet subscribers, while Vodafone, Idea Cellular and Reliance have 67.55 million, 44.03 million and 39 million users, respectively. Meanwhile, the state-run telecoms company, BSNL, has 34 million internet subscribers on its network.
Pichai made his comments about the huge amount of Indians using free Wi-Fi at railway stations while announcing Alphabet Google’s Q2 results. The company saw its second quarter revenues grow 21 percent to $21.5 billion while net income was $4.9 billion.
Mobile phones have revolutionized the way people consume information, according to Pichai. “Our investment in mobile underlines everything we do, from search and YouTube, to Android and advertising,” he said. “Mobile is the engine that drives everything.”He also mentioned that through Google’s “deep investments in machine learning and artificial intelligence,” the company is building the engine that will drive its future.