- Alphabet, the parent company of Google just announced terrible earnings, with sales soaring that surpassed Wall Street expectations.
- It was music to investors, but during an earnings call, CEO Sundar Pichai was battered by the recent Justice Department lawsuit.
- Analysts and investors are concerned about the potential impact of the incident, with a specific question as to whether Google will lose its exclusive contract with Apple possibly a “red code”.
- Pichai also tried to allay fears that this situation could distract Google, as it was for Microsoft in the 1990s.
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Alphabet, Google̵7;s parent company, hit some impressive numbers in Q3, beating Wall Street’s expectations sharply and sending its shares soaring in after-hours trading.
But analysts and investors cannot shake the looming shadow of the Justice Department’s lawsuit against Google last week. During the company’s earnings call, CEO Sundar Pichai tried to ask questions about the case in advance, telling analysts and investors that Google would “confidently bring their case. I.”
“Regarding the DoJ’s lawsuit, we believe that our products are creating significant benefits for consumers and we will confidently bring our case,” he said. “Our company focuses on continuing its work to build a looking product that people love and appreciate.”
But analysts followed a few questions about the lawsuit and Google’s partnership with Apple to remain the actual search provider on their devices – an annual contract. a $ 8 billion worth may be in sight.
“Is this really a ‘red code’ situation, or is this something we can manage?” Ross Sandler, an analyst at Barclays, asked Google’s internal codename about the possibility of losing a lucrative contract.
“Most of our partners choose us because we are the best search provider,” Pichai replied. “Users realize we have the highest search quality and therefore have a natural demand for that quality. And we believe in investing in our experience across all of our platforms, So we’re definitely committed to making sure we serve our users everywhere, and we’re really focused on it.
Pichai was also asked if it was likely that Google found “something in common” with the DOJ.
“Thorough scrutiny is not new to us, and in some respects it is not industry-wide and not surprising,” he replied. “We’ll get involved in a constructive way if possible and, as we’ve shown in a number of cases in the past … we are confident in the benefits we offer our users, they I’m going to make my case when there’s feedback or judgment, we’ll be flexible and adaptive, so we’re building that into it.
On the other hand, Pichai clearly tried to allay any fears that the incident might distract the company.
When Microsoft fought the Justice Department in the 1990s, distraction dulled the company’s ambitions and allowed competitors like Google to lead in areas like mobile.
“Although there is a lot on the legislative and regulatory fronts, when some of these issues are resolved, it also creates certainty and in some cases, clarity and muscle,” he said. Assembly, ”“ And that’s the framework we’re going to approach it with, and we’ll take a long look at it.
“But in the end, what is under our control is our ability to constantly focus on our users and make great products and that’s where the majority of our energy goes to use.”
According to analysts, during Apple’s earnings press conference also held late Thursday, CEO Tim Cook was also asked about the lucrative search deal with Google, which gives Apple between 8 and 12 billion. USD a year, according to analysts. The Apple CEO underestimated the importance of the deal and the ability to have immediate impact.
“I don’t know how the DOJ suit will go, but I think it’s a long way from coming to a conclusion.”
Get the latest Google stock price here.