- Google parent Alphabet announced gangbuster revenue with soaring sales that exceeded Wall Street expectations.
- It was music to investors’ ears, but on a profit phone call, CEO Dar Phi Chai was upset about the recent Justice Department lawsuit.
- Analysts and investors are concerned about the potential impact of the case, and there is someone specifically asking if Google’s losing its exclusive contract with Apple could be “code red”.
- Pichai, like Microsoft in the 90s, also tried to dispel concerns that the incident could be distracting for Google.
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The Google parent alphabet has just been submitted. Impressive Q3 figures, Significantly exceeded Wall Street’s expectations and surged the stock price in after-hours trading.
But analysts and investors couldn’t shake the shadow of the Justice Department lawsuit filed against Google last week. In the company’s revenue line, CEO Sundar Pichai tried to question the case in advance, telling analysts and investors that Google “will make our claims with confidence.”
“Regarding DoJ’s lawsuit, we believe our products are generating significant consumer benefits and we will confidently bring the case,” he said. “Our company’s focus is on continuing to build search products that people love and value.”
But analysts have asked several questions about the lawsuit and Google’s partnership with Apple. As of now, over $8 billion in annual transactions may currently be on the cutting board.
“Is this really a’code red’ situation, or is it a situation that we should be able to manage?” We asked Barclays analyst Ross Sandler about the possibility of losing a lucrative contract, referring to Google’s internal code name.
“Most partners choose us because we are the best search provider,” Pichai replied. “Users have found that we have the best search quality and there is an organic demand for it. We believe in investing in experience across all platforms. So we definitely do our best to serve our users everywhere. I’m doing it, I focused on it.
Pichai also asked if Google could find a “common ground” with the Justice Department.
He replied, “Investigation is not new to us, and in some ways it is not sector-wide and it is not surprising.” “We will engage as constructively as possible. As we have shown from past examples… we are confident in the benefits we offer our users. We will make cases where there is feedback or judgment. Flexible and adaptable. So We are building it.
At another point, Pichai tried to clear up concerns that the incident could distract the company.
When Microsoft fought itself with the Justice Department in the 1990s, the distraction blunted the company’s ambitions and allowed rivals like Google to stay ahead in areas like mobile.
“There’s a lot on the legislative and regulatory side, but as some of it gets resolved, it creates certainty and, in some cases, clarity and opportunities, too,” he said. “This is the framework we will approach and will take a long-term perspective.
“But in the end, what we control is our ability to constantly focus on users and create great products, and this is where most of our energy goes.”
According to analysts, at Apple’s earnings announcement, which also took place late Thursday, CEO Tim Cook was asked about a lucrative search deal with Google. Analysts say that Apple is making $8 billion to $12 billion a year. The Apple representative neglected the importance of the transaction and the possibility of immediate impact.
“I don’t know what the Justice Department case will be like, but I think it’s a long way from the conclusion.”
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