Google, which dominates online advertising, continues to thrive amid escalating threats of regulation in Washington and a wider backlash against Silicon Valley and widespread data collection.
In the first quarter, Google parent company Alphabet’s net income grew by 73 percent, totaling about $9.4 billion. Revenue rose 26 percent to $31 billion from $25 billion last year, beating analyst estimates. Alphabet’s stock climbed upward nearly 1 percent in aftermarket trading.
Following Facebook chief executive Mark Zuckerberg’s highly publicized hearings on Capitol Hill this month, lawmakers from both parties have pledged to introduce new data privacy regulations that would strike at the heart of Google’s business. In recent weeks, Facebook has been under the spotlight over its data collection practices and lack of transparency. But Google and its popular video service YouTube have also drawn scrutiny for surfacing questionable and extremist content, and potential violations of child privacy online.
Google chief executive Sundar Pichai said the company remains focused on ensuring that YouTube “remains a safe platform with great content,” adding that the service is “aggressively combating content that violates our strict policies.” Pichai also nodded to the shooting at YouTube’s headquarters earlier this month. A woman shot three people there over her inability to make money from her YouTube videos, and complained about being censored by the video site. “It’s been a particularly tough few weeks for the Google family, especially at YouTube,” Pichai said. He thanked employees, and said he was grateful for the support Google has received from the community and the industry.
Ruth Porat, chief financial officer of Alphabet, said that the company’s non-advertising businesses have also seen substantial growth, including its cloud storage unit, hardware such as the home speaker and Pixel phone, and Google’s mobile app store, Play.
Silicon Valley’s recent troubles, however, have not cut into the core businesses strength of Google. Facebook is scheduled to report earnings Wednesday.
Google is expected to command more than 37 percent of the U.S. digital ad market, at about $40 billion this year, continuing its dominance, according to eMarketer. The firm’s closest competitor, Facebook, will claim roughly 20 percent of the market. While the two firms are expected to hold their leading positions, other tech companies are chiseling away. Smaller players such as Amazon and Snapchat have seen rapid growth in digital advertising, pushing forecasts of Google and Facebook’s collective market share slightly downward to 57 percent, compared to 59 percent last year, eMarketer said.
Monica Peart, senior director of forecasting at eMarketer, said that Google’s growth in advertising is driven by consumer shifts to mobile, which Google has shifted to capture, as well as the success of YouTube’s advertising and subscription service.
Google’s first quarter earnings coincided with the company’s lobbying disclosures, filed late last week. In the first three months of this year, Google spent more than any other company, doling out more than $5 million to influence the federal government on issues including the regulation of online ads, child privacy and antitrust law. Last year, for the first time, Google spent more than any corporation on federal lobbying, which was also a first for any Silicon Valley company. Experts say the increased spending reflects a more skeptical mood in Washington, as well as the sprawling business endeavors that has brought Google and its products into so many facets of modern life.
(c) 2018, The Washington Post · Hamza Shaban