Jul 30, 2020 - Technology

Alphabet sees first-ever revenue decline

Illustration: Lazaro Gamio/Axios

Alphabet revenue dropped 2% from last year, the company announced in second-quarter earnings Thursday, beating Wall Street expectations a day after Google CEO Sundar Pichai appeared before the House Judiciary antitrust subcommittee to face allegations of anticompetitive behavior.

Yes, but: Despite beating expectations on revenue, the company still reported its first-ever decline, thanks to a reduction in the advertising growth rate thanks to the coronavirus pandemic. Stock rose slightly in after-hours trading.

Why it matters: The company may have fared better than investors were expecting, but the company remains almost entirely dependent on ad revenue and experienced a difficult quarter.

What they're saying: Ruth Porat, chief financial officer of Alphabet and Google, said the company saw gradual improvement in its ad businesses and strong growth in Google Cloud and other revenues.

  • “We continue to navigate through a difficult global economic environment," she said.
  • “We’re working to help people, businesses and communities in these uncertain times,” said Sundar Pichai, CEO of Google and Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”

By the numbers, via CNBC:

  • Earnings: $10.3 versus $8.21 per share, based on Refinitiv consensus estimates
  • Revenue: $38.3 billion, versus $37.37 billion expected by Refinitiv
  • YouTube advertising revenue: $3.81 billion versus $3.78 billion expected, according to StreetAccount estimates
  • Google Cloud revenue: $3.01 versus $3.06 billion expected, as per StreetAccount
  • Traffic acquisition costs (TAC): $6.69 billion versus $6.67 billion expected, as per StreetAccount

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Kyle Daly
Oct 20, 2020 - Technology

Here's what the U.S. antitrust case charges Google with

Illustration: Eniola Odetunde/Axios

The Justice Department's new antitrust lawsuit against Google centers on the charge that Google has built a self-reinforcing machine to illegally insulate it from any serious competition in search.

Why it matters: DOJ spent more than a year investigating Google to assemble what prosecutors believe is the cleanest case for convincing a court that the company is deliberately hamstringing would-be competition. Both sides now face the likelihood of a bruising, years-long battle that could expand to touch on other aspects of Google's business.

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Sara Fischer, author of Media Trends
Oct 20, 2020 - Technology

Netflix stock sinks after Q3 subscriber miss

Illustration: Rebecca Zisser/Axios

Netflix's stock was down more than 5% in after-hours trading Tuesday after the tech giant reported that it missed expectations on global subscriber growth for the quarter.

Why it matters: Netflix experienced explosive growth during the first half of the year. It wasn't expected to match that growth this quarter, when lockdowns lifted and after new competitive services had launched, but analysts were still expecting it to meet expectations of at least 3.3 million net new global subscribers.

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Ashley Gold, Kyle Daly
Oct 20, 2020 - Technology

Justice Department sues Google over alleged search monopoly

Illustration: Lazaro Gamio/Axios

The Justice Department and 11 states Tuesday filed an antitrust lawsuit against Google, accusing the company of using anticompetitive tactics to illegally monopolize the online search and search advertising markets.

Why it matters: The long-awaited suit is Washington's first major blow against the tech giants that many on both the right and left argue have grown too large and powerful. Still, this is just step one in what could be a lengthy and messy court battle.

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