Google was embarrassed by concerns about its management of sexual misconduct, Alphabet, the parent company, announced the third quarter earnings…
Google was embarrassed by concerns about its management of sexual misconduct, Alphabet, the parent company, announced the third quarter earnings of $ 33.7 billion.
The results met predictions for continued growth despite controversy of a new breach of the company’s social network, Google +.
Ruth Porat, CFO said sales growth increased 21% compared with the same period last year and reported a profit of $ 8.3 billion, with good performance from Youtube, Cloud and both desktops and mobile search.
The results came as the New York Times reported that Google gave former CEO Andy Rubin a $ 90 million retirement package, but hidden details about an allegation of sexual misconduct that triggered his departure.
The company’s CEO, Sundar Pichai, sent a letter to the staff on Thursday after the New York Times article was published and insisted that the company took a “tough line” in allegations of sexual misconduct, revealing that 48 people including 13 senior executives had been fired in the last two years.
However, the issue was not mentioned in the income statement. Critics have demanded an increase in state surveillance and regulation of technology companies and for the degradation of the monopolies they hold.
“It’s exciting to think that 20 years we’re still at the beginning of what’s possible,” Pichai said during the conversation and outlined the areas that helped the company to have a strong quarter.
He described how Google hardware devices, continued development core products such as search and map, and cloud, helped the company to continue to grow. He also said that they saw positive features of subscription services and prioritized Google News to ensure that “credible news sources” apparently occur.
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More than 70% of the revenue from the alphabet comes from Google Properties, and analysts had predicted that tech giant went well in the third quarter, even after the violation of Google’s already underperforming social network, Google +.
Earlier this month, Google ranked Google in the two most valuable brands of Interbrand, a global branding advice that releases an annual report based on relevance, responsiveness and presence. Google valued in the report to $ 155 billion and has been in the top three in the last six years, showing continued growth.
However, in early October, the Wall Street Journal revealed that third-party developers could access information from about 500,000 accounts and that Google’s managers had known the API API (Application Program Interface) since the beginning of spring.
In a blog post published in response to the story, the company said developers were unaware of the error and found no evidence that profile data was abused but announced that it would still turn off Google+ while it worked to strengthen data protection.
“Given these challenges and the very low usage of Google+ consumer version, we decided to sunset the consumer version of Google+,” said Ben Smith, adding that the consumer side of the social platform would be phased out over the next ten months.
Scott Galloway, a professor at NYU’s Stern School of Business, said it would not be a surprise that the move did not turn into a financial backlog in the quarter, especially given the badness of Google+.
“They were looking for an excuse to shut it down, he says.” Connecting this problem to closing the platform was uneven. “
Galloway stressed that even though data protection broke up controversy and concern from consumers, it did nothing to affect the financial outlook. “These scandals have created many headlines, but they have not affected business,” he said, explaining that the government’s intervention is the only thing that can slow down the alphabet.
“The risk of shareholders is that the ghosts of regulation, which in some way becomes increasingly realistic given the frequency of these companies blowing themselves, “he added.
” Monopolistic internet platforms like Google and Facebook are probably “too big to secure” and are certainly too big in order to trust “blind,” Jeff Hauser, from the Center for Economic Policy Research, told the guardian after the data breach was revealed earlier in the month n and added that the US Federal Trade Commission would break the platforms.
In a move, the analysts called for an attempt to advocate regulations on their own terms, Pichai went to Apple’s chairman, Tim Cook, to express support for increased government supervision to protect privacy at an internal conference in Brussels this month.
Pichai insisted on Thursday that Google had “always contacted our products with a strong integrity lens for our users”.
States in the United States are already making moves to pass legislative acts after sweeping legislation in the European Union. In June, California passed its own digital privacy team, which led the company’s lobbyists to advocate the federal government to draft more favorable rules.
Nevertheless, the alphabet has shown that it is strong enough to handle major regulations. During the last quarter, which closed in June, Alfabet reported that its profit was dampened by an unprecedented $ 5 billion fine from the European Union. The company still defied its expectations, with revenues of $ 32.6 billion in revenue and earnings of $ 2.8 billion. The upward trend is likely to continue experts say, unless even greater movements are made by the regulatory agencies.
“From an investor’s point of view, you are stupid not to own these shares,” said Galloway. “This company has an incredible profitability – because it’s great to be a monopoly in a growing economy. The only thing that stands between Google and continued growth is the government.”