Alphabet

Shareholder suit alleges Google covered up its sexual harassment problems with big payouts

Posted by | Alphabet, amit singhal, Android, andy rubin, Eric Schmidt, Google, John Doerr, Larry Page, lawsuit, Ram Shriram, Sergey Brin, sexual harassment, Sundar Pichai, TC | No Comments

Months after an earth-shattering New York Times investigation exposed Google parent company Alphabet’s $90 million payout to Android co-founder Andy Rubin, despite the accusations of sexual misconduct made against him, a Google shareholder is suing the company.

James Martin filed suit in the San Mateo Superior Court Thursday morning, alleging the company’s leaders deployed massive allowances to poor-behaving executives to cover up harassment scandals. Both Rubin and Google’s former head of search Amit Singhal, who peacefully left the company in 2016 amid harassment allegations that weren’t made public until the following year, are listed as defendants in the court filing. This is because the plaintiff is seeking a full return of the massive payouts awarded to the embattled former execs.

With charges including breach of fiduciary duty, unjust enrichment, abuse of power and corporate waste, per The Washington Post, the lawsuit asks for an end of nondisclosure and arbitration agreements at Google, which ensure workplace disputes are settled behind closed doors and without any right to an appeal. Martin is also requesting Google incorporate three new directors to the Alphabet board and put an end to supervoting shares, which gives certain shareholders more voting control.

The lawsuit also targets Rubin, Google co-founders Larry Page and Sergey Brin, chief executive officer Sundar Pichai and executive chairman Eric Schmidt. Former human resources director Laszlo Bock, chief legal officer David Drummond and former executive Amit Singhal are also named, as are long-time venture capitalists and Google board members John Doerr and Ram Shriram.

Google didn’t immediately respond to a request for comment.

Following the release of the NYT report, Googlers across the world rallied to protest the company’s handling of sexual misconduct allegations. The protestors had five key asks, including an end to forced arbitration in cases of harassment and discrimination, a commitment to end pay and opportunity inequity and a clear, uniform, globally inclusive process for reporting sexual misconduct safely and anonymously. Google ultimately complied with employees and put an end to forced arbitration; other tech companies, such as Airbnb, followed suit.

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Google still claimed to be blocking search rivals on Android, despite Europe’s antitrust action

Posted by | Alphabet, Android, antitrust, competition, Europe, european commission, France, G Suite, Google, huawei, Marissa Mayer, Mobile, play store, Qwant, Search, search engines, smartphones, TC | No Comments

Mobile licensing changes made by Google this fall, when it tweaked terms for OEMs wanting to license its Android smartphone platform on devices destined for the European market, don’t appear to be offering succour to search rivals — despite being triggered by an antitrust ruling intended to reset the competitive playing field.

The European Commission found the search giant guilty of anti-competitive practices related to its Android platform this summer, slapping the company with a $5BN fine. The decision required Google cease practices judged to be illegally skewing the market and do so within 90 days.

It was the second such major EC antitrust finding against Google, after last year’s Google Shopping ruling, when the company was warned that having been found dominant in search it had a “special responsibility” to avoid breaching antitrust rules in any market it plays in.

Google disputes the Commission’s findings of competitive abuse in both cases, and has lodged legal appeals.

But the nature of competition law demands action in the meanwhile, given the threat of punitive penalties for any continued breach. So in October Google responded to the Commission’s Android ruling by updating its regional compatibility agreement to provide a route for OEMs to unbundle key services from the Android OS — rather than requiring its suite of Google apps be pre-loaded for devices to get the Play Store.

However it also incorporated licensing fees for some unbundled configurations (e.g. Android + Play Store). At the same time it said it would not charge any fee to include search or Chrome. And it said it was offering incentives for OEMs to place its eponymous, market dominating search engine (and/or browser) prominently on their devices — despite one of the behaviors the Commission judged illegal being payments Google had made to certain large manufacturers and mobile carriers to exclusively pre-install Google Search.

The Commission did not prescribe specific remedies for the anticompetitive behaviours it pegged to Android — saying it’s “Google’s sole responsibility to make sure that it changes its conduct in a way that brings the infringements to an effective end”.

Though it warned it would closely monitor the company’s conduct, noting that any finding of continued non-compliance would risk fresh fines — of up to 5% of the average daily turnover of Alphabet for each day of non-compliance.

The key word there is “effective” — in terms of what the Commission is watching for.

Meanwhile Google’s dominant position in search naturally makes it the smartphone consumer’s go-to choice — which in turn means there’s a natural incentive for device makers not to ditch Google as the search default. At least for mainstream devices.

But Google’s new European licensing terms for Android appear to be piling additional pressure on OEMs not to switch even for more experimental and/or regional device launches, according to privacy-focused search engine Qwant.

The suggestion is Google’s licensing changes have essentially blocked the launch of an Android device with Qwant search rather than Google as the default.

Pay to install

Its experience suggests Google’s initial ‘remedy’ — far from delivering an “effective end” to the competitive infringements the Commission found — is actively steering OEMs away from search alternatives and rival companies.

Qwant, a French startup, launched its non-tracking search offering back in 2013, and has been on a growth tear on its home turf in recent months — winning over high profile users in the public sector as concern has risen about Silicon Valley’s intrusive grip on user data.

The French National Assembly and the French Ministry of the Armed Forces Minister announced this fall they’d switch to Qwant instead of Google as their default.

Of course the startup is still a minnow compared to Google. But it’s growing: Qwant tracks queries rather than users (given it doesn’t track people), and it says it generated 2.6BN queries in 2016; which grew to 9BN last year; and is now on track to end this year with around 18BN queries.

“So if we think about it that means that last year we were three days of Google; this year six days of Google — not so bad!” says co-founder Eric Leandri.

“In France we have now more than 6% of the market,” he continues. “In Germany something like 2%. And we are still growing. We do growth of 20% by month for the last four months. The growth in our revenue is two digit too, by month.”

Earlier this year it had been hoping to make additional regional marketshare gains by securing a deal to be pre-loaded on Android smartphones destined for European markets. A spokesman tells us it has a framework agreement with Huawei. (The Chinese Android OEM is second only to Samsung in global marketshare terms, according to analysts.)

The Commission’s antitrust ruling opened the door to this possibility, given it banned Google from prohibiting OEMs from launching non-Google approved Android forks. So after the ruling things were looking good for Qwant, with the startup on the cusp of securing a device deal for a few European countries, as Leandri tells it. 

He blames Google’s licensing changes for putting the kibosh on a launch they’d been expecting to be able to announce in November. Early that month the startup pinged us to trail forthcoming news — of “a major partnership that will allow us to accelerate in the smartphone market” — only to go silent.

A few weeks later it got in touch again to say it had had to postpone the announcement.

“We are very near to one or two deals to be by default or in the list of search engines in some Android cell phone made by a very large Asian manufacturer… Just for Europe, and just for some countries in Europe but we are talking about 10 million or 20 million of cell phones,” says Leandri now.

“And when we have won the bid against Google in October then Google start to say that in Europe you have to pay $40 for Android. So now if you install Qwant you have to pay $40 and if you install Google they give you some cash.”

“Before it was impossible to bid against Google because Google was blocking everything. Now you can — but now the solution of Google is you have to pay $40 if you don’t install Google by default with Chrome just on the bar. You know the bar that is fixed on Android. And this is again an abuse of their dominant position,” he adds.

“Because if I want, for example, 10 million smartphones, the guy has to pay $400M to Google. Do you really think they will pay $400M to Google just to install Qwant?”

Google’s rebuttal of the Commission’s antitrust finding for Android has focused on claims that its approach of free licensing combined with a bundle of Google services has generally enabled competition to thrive in the mobile app ecosystem, as well as claiming lower prices are a “classic hallmark… of robust competition”.

Yet Qwant’s experience offers a clear counterpoint, underlining how challenging it remains to try to compete with Google’s core search business when the same company also dominates the smartphone market and can just throw the levers of Android’s licensing terms to configure how much ‘appetite’ OEMs have for investing in alternative search defaults (given tiny hardware profit margins in the Android space).

After Qwant won over Huawei to building a device with its search engine in prime position, Leandri says it was Google’s changes to the licensing terms for Android that threw a spanner in the works.

“After that pressure then the manufacturer doesn’t know how to react now,” he says, confirming he believes there’s currently no chance for the device to be launched. Not without further changes to how Android operates in the market — i.e. further regulatory intervention.

“So we will work a lot with the European Commission to stop that,” he adds. “But again, again my question is why Google goes that way?”

We reached out to Google to ask about the fees it would charge an OEM wanting to launch an Android device with Google Play but without Google search as the default in Europe.

We also asked how charging a fee for Android if OEMs don’t also bundle Google services can help increase competition, per the Commission’s intention.

At the time of writing Google had not responded to our questions.

We also reached out to Huawei for comment and will update this story with any response.

Even if Qwant and Huawei get their way, and European buyers in a handful of countries are able to choose to buy an Android device with a little search localization as its differentiating out-of-the-box twist, Leandri isn’t under any illusions that a majority of consumers will still switch back to Google of their own accord — given its dominance of search.

He reckons those who’d stick with a non-Google search choice might be as low as a third or 40%. 

But his point is that, as it stands, Qwant doesn’t even have the chance to try competing against the Google Goliath on its own terms. And he argues that’s simply not fair. 

“Google has billions to make advertisement to ask people to switch, right. And they can even do advertisement on the Play Store for zero because they control the Play Store. Why they don’t come back to a normal market where we are all on the same line and they just compete with advertisement, with pushing their products, with a better proposition of value. It’s crazy, it’s crazy!” he says.

“They have 95% of the market, and on that market they expect that if they don’t have the search by default there then they don’t do money with the Play Store. This is bullshit. They do billions of euros with the app on the Play Store each year. With the 30% that they take on the apps. So this is not true. This is not true, sorry.

“So right now this is our goal and my main work actually is just to obtain the right to have a fair competition — a simple, fair competition.”

“I don’t want to dismantle Google. I don’t want Google to be fined 10BN. I don’t care. The only thing I want is to have the right to have a fair competition,” he adds.

We asked the European Commission to respond to Qwant’s experience, and for an update on its monitoring of Google’s compliance with the Android antitrust ruling.

A spokeswoman declined to comment on an individual case but we understand the Commission has been sending questionnaires to market players as part of its compliance monitoring.

It’s clear the regulator’s intention with the Android decision was to expand consumer choice by creating opportunities for competition that didn’t exist before — including for rival search and browser providers to be able to compete on the merits with Google when it comes to pre-loading their products on Android devices.

So if the Commission’s monitoring efforts confirm instances where competition is being blocked, as appears the case here with Qwant, further interventions will surely follow.

Leandri also points out that Google made much the same arguments vis-a-vis ‘fair competition’ more than a decade ago — when it called for the then computing incumbent, Microsoft, not to stand in the way of Internet upstarts by bundling MSN search into its Internet Explorer web browser. 

“The market favors open choice for search, and companies should compete for users based on the quality of their search services,” said Marissa Mayer in 2006then Google’s vice president for search products. “We don’t think it’s right for Microsoft to just set the default to MSN. We believe users should choose.”

“I totally agree with what they say in 2006! Just exchange Microsoft for Google and that’s it!” he says now, adding: “We have to fight because there is not a lot of other way. But I stop fighting tomorrow as soon as I have a fair competition.

“I’m not waiting for the Commission to make the competition. Right now the percentage of growth that I have in France it’s not based on the Commission who has won or not. It’s based on our value proposition.”

Leandri is also president of the Open Internet Project, a European organization whose members lobby for regulatory action to rein in what they view as Google’s abusive dominance of digital markets, and which was also involved in the Google Shopping complaints — though he points out that in the Android case three of the five complainants are American. 

“We are the only European. So the problem is not only for a small startup in Europe. Who, y’know, complained because ‘Google is so cool’. And we are so dumb. And so ridiculous. But the problem is for Oracle, it’s for the Fair Search. It’s not for kids.”

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Epic Games just gave a perk for folks to turn on 2FA; every other big company should, too

Posted by | Alphabet, Apple, epic games, Gaming, Microsoft, multi-factor authentication, Security, SMS, TC | No Comments

Let’s talk a bit about security.

Most internet users around the world are pretty crap at it, but there are basic tools that companies have, and users can enable, to make their accounts, and lives, a little bit more hacker-proof.

One of these — two-factor authentication — just got a big boost from Epic Games, the maker of what is currently The Most Popular Game In The World: Fortnite.

Epic is already getting a ton of great press for what amounts to very little effort.

Son: Do you know what two-factor authentication is?
Me: Uh, yeah?
Son: I get a free dance on @Fortnitegame if I enable two factor. Can we do that?

Incentives matter.

— Dennis (@DennisF) August 23, 2018

The company is giving users a new emote (the victory dance you’ve seen emulated in airports, playgrounds and parks by kids and tweens around the world) to anyone who turns on two-factor authentication. It’s one small (dance) step for Epic, but one giant leap for securing their users’ accounts.

The thing is any big company could do this (looking at you Microsoft, Apple, Alphabet and any other company with a huge user base).

Apparently the perk of not getting hacked isn’t enough for most users, but if you give anyone the equivalent of a free dance, they’ll likely flock to turn on the feature.

It’s not that two-factor authentication is a panacea for all security woes, but it does make life harder for hackers. Two-factor authentication works on codes, basically tokens, that are either sent via text or through an over-the-air authenticator (OTA). Text messaging is a pretty crap way to secure things, because the codes can be intercepted, but OTAs — like Google Authenticator or Authy — are sent via https (pretty much bulletproof, but requiring an app to use).

So using SMS-based two-factor authentication is better than nothing, but it’s not Fort Knox (however, these days, even Fort Knox probably isn’t Fort Knox when it comes to security).

Still, anything that makes things harder for crimes of opportunity can help ease the security burden for companies large and small, and the consumers and customers that love them (or at least are forced to pay and use them).

I’m not sure what form the perk could or should take. Maybe it’s the promise of a free e-book or a free download or an opportunity to have a live chat with the celebrity, influencer or athlete of a user’s choice. Whatever it is, there’re clearly something that businesses could do to encourage greater adoption.

Self-preservation isn’t cutting it. Maybe an emote will do the trick.

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Google beats expectations again with $31.15B in revenue

Posted by | Alphabet, Earnings, Finance, Google, Mobile | No Comments

Alphabet, Google’s parent company, reported another pretty solid beat this afternoon for its first quarter as it more or less has continued to keep its business growing substantially — and is growing even faster than it was a year ago today.

Google said its revenue grew 26% year-over-year to $31.16 billion in the first quarter this year. In the first quarter last year, Google said its revenue had grown 22% between Q1 of 2016 and Q1 of 2017. All this is a little convoluted, but the end result is that Google is actually growing faster than it was just a year ago despite the continued trend of a decline in its cost-per-click — a rough way of saying how valuable an ad is — as more and more web browsing shifts to mobile devices. Last year, Google said it recorded $24.75 billion in the first quarter.

Once again, Alphabet’s “other bets” — its fringe projects like autonomous vehicles and balloons — showed some additional health as that revenue grew while the losses shrank. That’s a good sign as it looks to explore options beyond search, but in the end it still represents a tiny fraction of Google’s overall business. This was also the first quarter that Google is reporting its results following a settlement with Uber, where it received a slice of the company as it ended a spat between its Waymo self-driving division and Uber.

Here’s the final scorecard:

  • Revenue: $31.16 billion, compared to $30.36 billion Wall Street estimates and up 26% year-over-year.
  • Earnings: $9.93 per share adjusted, compared to $9.28 per share from Wall Street
  • Other Revenues: $4.35 billion, up from $3.27 billion in Q1 last year
  • Other Bets: $150 million, up from $132 million in Q1 2017
  • Other Bets losses: $571 million, down from $703 million in the first quarter last year
  • TAC as a % of Revenue: 24%
  • Effective tax rate: 11%, down from 20% in Q1 2017

In the end, it’s a beat compared to what Wall Street wanted, and it’s getting a very Google-y response. Investors were looking for earnings of $9.35 per share on $30.36 billion in revenue. Google’s stock is up around 2% in extended trading, which for Google is adding more than $10 billion in value as it races alongside Microsoft and Amazon to chase Apple as the most valuable company in the world by market cap. Google jumped as much as 5% in extended trading, though it’s flattened out

Google’s traffic acquisition cost, or TAC, appears to also remain stable as a percentage of its revenue. This is a little bit of a sticking point for observers for the company and a potential negative signal for investors as more and more web browsing shifts to mobile. It’s ticked up very slowly over the past several years, but is now sitting at around 24% of its total revenue.

Google, at its core, is an advertising company that is going to make money off its billions of users across all of its properties. But as everything goes to mobile devices, the actual value of those ads is going to drop off over time simply because mobile browsing has a different set of behaviors. Google’s business has always been to offset that cost-per-click with a growing number of impressions — and, indeed, it seems like the status quo is sticking around for this one.

While Google’s advertising business continues to chug along, that diversification of revenue streams is going to be increasingly important for the company as a hedge against any potential threats to its advertising income. Already there is some chaos when it comes to what’s happening with user data following a massive scandal where information on as many as 87 million Facebook users ended up with a political research firm, Cambridge Analytica. That backlash centered around user privacy may end up tapping Google, which dominates most of how information travels across the web with Gmail and Search among its other products.

But that still comes at a pretty significant cost. It’s made major investments into tools like Google Cloud (or GCP), but tucked into the earnings report is a line item that shows its “purchases of property and equipment” more than doubled year-over-year to around $7.3 billion, up from $2.5 billion in the first quarter this year. Of course this can encompass a ton of things, but Google still has to actually buy servers if it’s going to run a cloud platform that can compete with AWS or Microsoft’s Azure.

All that feeds into its “other income” stream, which grew from $3.2 billion in Q1 last year to $4.35 billion in the first quarter this year. Amazon’s cloud business is already more than a $10 billion business annually, and that first-mover advantage has served it well as it began a huge shift to how businesses operate on cloud servers. But it also exposed a massive business opportunity for Google, which continues to invest in that.

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Alphabet is tumbling after a fourth quarter whiff and names John Hennessy as new board chair

Posted by | Alphabet, Apps, Earnings, Finance, John Hennessy, Mobile, TC | No Comments

MOUNTAIN VIEW, CA - MAY 18: Google CEO Sundar Pichai speaks during Google I/O 2016 at Shoreline Amphitheatre on May 19, 2016 in Mountain View, California. The annual Google I/O conference is runs through May 20. (Photo by Justin Sullivan/Getty Images) Google parent company Alphabet’s big run over the past few months came to a screeching halt today after it came out with its fourth-quarter results, which fell beneath expectations set by Wall Street for the advertising giant — sending the stock down around 5 percent and shaving off billions in market cap. Read More

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Google might bring Nest back into its own hardware business

Posted by | Alphabet, Android, computing, Gadgets, Google, hardware, TC, technology, world wide web | No Comments

 Google might fold Nest back into the Google, well, fold. The company is considering integrating Nest, which is a separate company under mutual parent Alphabet at the moment, back into Google’s hardware business.
The re-integration, first reported by Wall Street Journal, is a move that Google is considering as a way to help it build out its smart home capabilities vs. Amazon, which is… Read More

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Google reportedly offered $30 billion to acquire Snapchat

Posted by | Alphabet, Apps, Evan Spiegel, Fundings & Exits, Google, Mobile, Snap, Snapchat, Social, TC | No Comments

 Nerdy Google has failed at social time and time again, so it considered buying teen sensation Snapchat. According to reports, the search giant held informal talks with Snap and floated an offer of $30 billion in 2016 before Snap’s last funding round, and just before its IPO this year. That offer was apparently an open secret inside Snap, and was on the table after the IPO, too. Read More

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The Nest Cam IQ may be smarter, but it’s not yet brilliant

Posted by | Alphabet, Gadgets, hardware, Nest, Reviews, TC | No Comments

 The Nest Cam IQ is the latest product from Alphabet-owned smart home company Nest, an HD security camera with a 4K sensor it uses to do things like intelligently track faces and people at higher resolution. I’ve been testing the $299 Nest Cam IQ for a while now, and it’s an improvement over other smart home security cameras – but its IQ still leaves a lot to be desired.… Read More

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Crunch Report | Google Home Gets More Personal

Posted by | Advertising Tech, Alphabet, Chrome, Gadgets, Google, google home, GoPro, Influencer Marketing, Shopify, Social, TC | No Comments

Crunch Report April 20 Today’s Stories  Google Home can now recognize up to six voices and give personalized responses Google said to be planning a built-in ad blocker for Chrome GoPro to release prosumer spherical camera in fall 2017 FTC tells ‘influencers’ to quit trying to hide the fact that they’re shilling for brands Shopify launches a free, in-house-designed card reader Credits… Read More

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Alphabet tried to convince Wall Street it’s not just a search engine this year

Posted by | Alphabet, Apps, Earnings, Google, Larry Page, Mobile, TC | No Comments

Alphabet CEO Larry Page speaks at the Fortune Global Forum in San Francisco, Monday, Nov. 2, 2015. (AP Photo/Jeff Chiu) Google (or Alphabet, if you prefer) has long been plagued with a problem with its advertising business: while the number of ads people are clicking on has been growing, the value of those ads has been constantly dropping. Google has always excelled at showing the best ads against a search result, but that business may not last forever as the way people interact with technology starts to… Read More

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