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The day Google was overwhelmed by concerns over the treatment of badual misconduct charges, Alphabet, its parent company, reported earnings of $ 33.7 billion in the third quarter.
The results obtained fulfilled the expectations of continued growth despite the controversy surrounding a recent data breach. on the social network of the company, Google +.
Ruth Porat, Chief Financial Officer, said that revenue growth had increased 21 percent over the same period last year and had posted a profit of $ 8.3 billion, with good performance of Youtube, Cloud and both desktop computers.
The results were revealed when the New York Times announced that Google had awarded former executive Andy Rubin a $ 90 million layoff, while concealing the details of an allegation of "misconduct". badual misconduct which motivated his departure.
Sundar Pichai, Thursday sent a letter to staff after the publication of the New York Times article, insisting that the company adopt a firm stance regarding charges of badual misconduct. It has been reported that 48 persons, including 13 senior managers, had been dismissed in the last two years.
However, the problem was not mentioned in the call for results. Critics have called for stronger government oversight and regulation of technology companies and a crackdown on the monopolies they hold.
"It is exciting to think that we are at the beginning of what is possible 20 years ago," Pichai said. During the conference call, he explained the areas that allowed the company to experience solid quarter.
He explained in detail how Google's hardware devices, the continued development of core products, such as research and mapping, and the cloud, helped the company continue to grow. He also said that the subscription services had a positive impact and that they gave priority to Google News to ensure that "credible sources of information" were highlighted.
Alphabet derives more than 70% of its revenue from its real estate sales, and badysts had predicted that the technology giant was heading toward the third quarter on a positive note, even as a controversy in the about a data breach had resulted in the closure of Google's social network, already underperforming. , Google +.
Earlier this month, Google was among the two most valuable brands in Interbrand, a global brand consulting company, which publishes an annual report based on its relevance, responsiveness and presence. In the report, Google valued $ 155 billion and was in the top three in the last six years, recording considerable growth.
But in early October, the Wall Street Journal revealed that third-party developers could access information from about 500,000 accounts, and that Google executives knew about the bug in its API (application programming interface) since early spring.
In a blog post published in response to the story, the company said the developers were not aware. They found no evidence of misuse of the profile data, but announced that they would always close Google+ as the system strengthened data protection.
"Given these challenges and the very low usage of the consumer version of Google+, we decided to disable the consumer version of Google+," wrote Ben Smith, Google, adding that the consumer component of the Social platform would slowly disappear over the next ten months.
Scott Galloway, a Professor at the Stern School of Business at the University of New York City said that one should not be surprised that the move does not turn into a financial disaster this quarter, especially given the poor performance of Google+.
"They were looking for an excuse to close it. down, he says. "Linking this problem to the closure of the platform was an illusion."
Galloway pointed out that while the data breach was controversial and a concern for consumers, it did not affect nothing the financial perspectives. "These scandals made a lot of headlines, but they did not have a negative impact on business results," he said, explaining that the government's intervention was the only one something that could slow down Alphabet.
"The risk for shareholders is that regulation becomes increasingly realistic given the frequency with which these companies explode," he added.
"Monopolistic Internet platforms such as Google and Facebook are probably" too big to be secure "and certainly" too big to trust "blind," Guardian Jeff Hauser told reporters. Center for Economic Policy Research, after the revelation of the data breach earlier this month, adding that the US Federal Trade Commission had to dismantle the platforms.
Pichai joined Apple's President, Tim Cook, to express his support for increased government oversight on privacy protection international conference in Brussels this month.
Pichai insisted Thursday that Google "has always approached our products with a strong privacy protection objective for our users".
The United States is already taking steps to enact regulatory laws European Union legislation. In June, California pbaded its own digital privacy law, prompting technology lobbyists to ask the federal government to draft more favorable rules.
Alphabet showed that it was powerful enough to withstand heavy regulatory losses. During the last quarter, closed in June, Alphabet announced that its profits had fallen after an unprecedented $ 5 billion fine from the European Union. The company has always challenged expectations with a turnover of $ 32.6 billion and a profit of $ 2.8 billion. Experts believe that the upward trend will continue unless regulators take even more ambitious measures.
"From an investor's point of view, you are stupid not to own these stocks," Galloway said. "This company has incredible earnings power – because it's great to be a monopoly in a growing economy. The government is the only hurdle between Google and continued growth. "
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