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  HOME | Business & Economy (Click here for more)

Alphabet Posts 8.65% Growth in Profits amid Antitrust Pressures

SAN FRANCISCO – United States multinational Alphabet, the parent company of Google, announced on Monday an 8.65-percent year-on-year increase in profits in the first nine months of the year despite facing intense pressure from antitrust regulators.

The California-based company posted a profit of $23.67 billion between January and September and, during this period, it earned $115.78 billion, an increase of 18.7 percent over the $97.54 billion of the same period last year.

Meanwhile, the basic earnings from shares was $34.12, compared to $31.24 a year ago.

The vast majority of Alphabet’s revenue continues to come from the sale of advertising space on the Internet and services linked to this segment, which account for 85 percent of the total turnover of the company led by Google co-founder Larry Page.

The remaining earnings (15 percent) came mostly from other business segments within Google, including sales of Pixel phones and other hardware devices and its cloud computing service, Google Cloud.

Earnings from new businesses outside of Google, which Alphabet dubs “Other Bets,” such as self-driving cars company Waymo, stood at an almost-negligible $155 million.

Since the close of the previous fiscal year, the long-term debt of the world’s most-used search engine company has remained stable, rising only slightly from the $4.01 billion at the end of 2018 to the present $4.08 billion.

“I am extremely pleased with the progress we made across the board in the third quarter, from our recent advancements in search and quantum computing to our strong revenue growth driven by mobile search, YouTube and Cloud,” Google CEO Sundar Pichai said in a statement.

One of the factors that have helped Alphabet post better results as compared to last year is that, unlike 2018, when it had to pay up to $5.07 billion in fines imposed by the European Commission, this year it has had to cough up a much lesser $1.69 billion.

However, the horizon doesn’t look particularly rosy for Alphabet in this respect because, while it seems that regulatory pressure has eased relatively, at least in Europe, the same battle is now opening up in the US, especially for alleged monopolistic practices.

Currently, Google is being investigated for potential violations of antitrust law by at least three different agencies: the Department of Justice, the Democrat-led House Judiciary Committee, and a bipartisan coalition of the attorney generals of 48 states.

On the other hand, just hours before Alphabet released its results, some US media reported that the company had made an offer to acquire fitness tracking gadget-maker Fitbit, one of the largest players in the sector.

Analysts agree that the business opportunities and strategic value of companies such as Fitbit going forward lie in the large amount of data that they manage on their users’ health and fitness, which is of a particularly sensitive nature in regard to privacy.

This means that, if this acquisition is confirmed, despite the great qualitative jump it would imply for Alphabet within this sector, it would also entail even more intense scrutiny by regulators.

Alphabet’s results failed to convince investors on Wall Street and the company’s shares fell 1.08 percent to $1,275.05 per share in the electronic trading operations after closing.

 

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