The pressure is on for Google’s parent company Alphabet to find new ways to make money beyond search. But the company is still finding ways to make search pay.
During today’s earnings call, CEO Sundar Pichai emphasized strong growth in video advertising on YouTube and improved games sales in the Google Play store. But bigger mobile search revenues stole the show.
Advertising revenue increased by 16 percent year-over-year, Google said. The company didn’t break down how much of that came from mobile search, but CFO Ruth Porat said mobile search was the biggest driver of that increase, largely as the result of changes to the company’s mobile ad formats during the third quarter of last year.
Those increased revenues weren’t enough to keep Alphabet’s stock from tumbling about six percent in after-hours trading after the company missed expectations, bringing in, ahem, merely $20.26 billion in revenue—still an increase of 17 percent—versus the $20.38 billion that Wall Street expected.
Still, the growth in mobile search revenue is good news as Alphabet’s various moonshots keep losing hundreds of millions of dollars. The company does need to keep diversifying, but search is still going strong.
Google’s parent company more than doubled the revenue it generated from its moonshots like its smarthome company Nest, broadband provider Google Fiber, and life sciences division Verily. Unfortunately, Alphabet is also losing more money on those bets.
In its second quarter earnings report today, Alphabet said revenue from its so-called “other bets” rose from $80 million last year to $188 million for the same quarter this year. But overall losses devoured that growth and then some, mounting to $802 million from $633 million during the same time last year.
That’s just one piece of bad news for Alphabet, which missed analyst expectations, sending shares tumbling nearly six percent in afte- hours trading despite 17 percent revenue growth year-over-yeas.
Alphabet has been haunted in recent weeks by rumors that Nest is underperforming and struggling to retain key employees amid internal strife. The company’s decision to stop supporting its Revolv smart hub product, effectively making the device worthless, didn’t help with the perception that not all is well at Nest. Meanwhile, Alphabet is reportedly looking to sell off robotics company Boston Dynamics.
These projects are important for Alphabet as investors pressure the company to diversify its revenue beyond Google’s search business. But Google does have one non-search success story: YouTube has emerged as one of the company’s most important revenue streams.
In a call with analysts, CEO Sundar Pichai said that a decade ago, YouTube seemed like a moonshot. While streaming video is not quite in the same league as building human-like robots, it’s true that Google’s billion-dollar acquisition of the site in 2006 seemed a little crazy. YouTube let people upload huge video files for free while many of those same users blatantly and routinely violated copyrights. During the hangover of the dotcom bust, the idea that YouTube could pay its infrastructure bills with ads seemed farfetched. That wild bet paid off. Some of Google’s other crazy ideas may work out yet.
Google’s “do no evil” motto is being challenged this week in a complaint charging the company with secretly collecting and storing data on school children through its Chromebook and Apps for Education program.
The complaint, filed by the Electronic Frontier Foundation with the FTC, accuses Google of unfair and deceptive business practices for monitoring the online activity of students who use its Chrome browser without obtaining their permission.
The EFF found that Google’s Chrome browser has its “Sync” feature enabled by default on Chromebook laptops the company has sold to schools through its educational program. “This allows Google to track, store on its servers, and data mine for non-advertising purposes, records of every Internet site students visit, every search term they use, the results they click on, videos they look for and watch on YouTube, and their saved passwords,” the civil liberties group said in a statement. “Google doesn’t first obtain permission from students or their parents and since some schools require students to use Chromebooks, many parents are unable to prevent Google’s data collection.”
This directly violates a privacy agreement Google signed, along with about 200 other companies, promising to refrain from collecting, using, or sharing the personal information of students except for legitimate educational purposes or when parents grant permission.
But Google’s actions don’t just violate the privacy agreement it pledged to uphold; they also violate the Federal Trade Commission rules against deceptive business practices.
“Minors shouldn’t be tracked or used as guinea pigs, with their data treated as a profit center,” EFF Staff Attorney Nate Cardozo said in a statement. “If Google wants to use students’ data to ‘improve Google products,’ then it needs to get express consent from parents.”
Google has already told EFF that it will turn off the “Sync” feature for schools. But EFF wants the FTC to investigate Google’s conduct and prevent it from using the personal information of students for any purpose other than educational. The group also wants the FTC to order Google to destroy any information about students it has already collected through its school apps program.
This isn’t the first time Google has come under fire for privacy violations involving its Apps for Education program. Last year the company was hit with a lawsuit over claims that it was conducting illegal wiretapping by scanning the contents of student email messages in order to deliver targeted ads to students in the Apps program. Google asserted in court documents that it did not display ads in the suite of apps included in its Apps for Education toolset distributed to schools, but admitted that it “does scan [student] email” to “compile keywords for advertising” on Google sites that students in the program visit. Students who used the apps on the school-issued Google Chromebooks were tracked as they logged into their Gmail accounts. The company eventually agreed to halt the scanning.
Student-issued laptops have been in the news for other privacy violations unrelated to Google. In 2010, a school district in Pennsylvania secretly snapped thousands of images of students using the webcams in their school-issued laptops. Some of the images captured students at home, in bed and even partially dressed. Although the school insisted the cameras were activated only a handful of times after a laptop was reported stolen or missing, this proved to be untrue after thousands of images were discovered that had been taken from laptops never reported lost or stolen.
The complaint against Google is more widespread since it affects schools throughout the country that are using its Chromebooks; though the precise privacy violations alleged against the tech giant are much less invasive than the webcam scandal.
Update 3pm PST: To add info about previous lawsuit filed against Google for scanning student email.
Google just made it possible for you to score a seat at The Metropolitan Opera without shelling out hundreds of dollars. You can even step on the stage. Oh, and you can do it from the comfort of your own living room.
Today, the Google Cultural Institute announced a new partnership with 60 performing arts institutes around the world to bring 360-degree view, live performances to online audiences. Think of it as Street View, but instead of a suburban ranch house or office complex, you get dynamic performances from the American Ballet Theatre or Carnegie Hall or the Royal Shakespeare Company. Just as you might poke around neighborhood corners on Street View, with Google’s technology, you can creep up behind a violinist, hover above Henry V during a monologue, even zoom in to explore every brushstroke on the theater ceiling.
The new collection is an extension of the Cultural Institute’s previous work in the visual arts, which started in 2011 as a way for Google to showcase select works of art online. Since then, it’s grown to include street art and so-called “world wonders,” like Pompeii. The Institute now has 41 million users worldwide, who spend an average of 3.46 minutes on the site.
The goal of the Institute is to bring the arts to people who might not otherwise have access to or be able to afford trips to world-famous museums, or in this case to the opera. Google also isn’t the only one trying to open the world of the arts to the masses with technology. Just last month, The Lion King on Broadway released its own 360 video experience. Google’s 360-degree videos can also be viewed on the Google Cardboard headset, but it hasn’t yet developed a true virtual reality experience.
More and more, the world of the arts and the world of tech are colliding in this way, as creative institutions begin to realize that while technology will never be a replacement for the real thing, it may well be the gateway drug for a new generation to become interested in the arts.
“It’s going to transform the role of the arts in society,” said Clive Gillinson, executive and artistic director of Carnegie Hall, during Google’s announcement this morning, “and to us that’s what matters the most.”
You can dive into the Cultural Institute’s performing arts exhibit here, and experience one of the first videos from the project—the Philadelphia Orchestra playing Carnegie Hall—above.
The hit show Silicon Valley revolves around the creation of a powerful compression algorithm that can make multimedia files much smaller, potentially speeding up both streaming video and file downloads online. On the show, the inner workings of the code are a secret coveted by fictional startup Pied Piper’s competitors. But in real life, Google is giving away its new compression technology for free.
Google has released the source code for a new compression algorithm called Brotli, which the company hopes will help speed up web browsing by shrinking images, web fonts, and other content.
“We hope that this format will be supported by major browsers in the near future,” Google engineer Zoltan Szabadka wrote in a blog post, “as the smaller compressed size would give additional benefits to mobile users, such as lower data transfer fees and reduced battery use.”
The new algorithm is a successor to Google’s Zopfli compression algorithm, which the company published two years ago. According to a paper released by the Google, the new algorithm enables both faster compression and smaller file sizes than Zopfli. (Google didn’t note what the Brotli’s Weissman Score is.)
WIRED
Google is using the massive power of its search engine to collect donations for the refugee crisis. The search giant, which has already donated about $1 million to human rights organizations working to help refugees, is now publishing a banner ad, urging its users to give, with a “Donate” button.
Click the button, and it leads you to a website, where Google explains it will match 100 percent of donations it receives until it reaches its goal of $11 million. Google announced its matching plan in a blog post this week, written by a Google employee named Rita Masoud who is also a refugee from Afghanistan. “I was lucky,” Masoud writes in the post. “But as the refugee and migrant crisis has grown, many people like my family are desperate for help.”
Google plans to give those donations to the donor-advised fund Network for Good, which will then distribute the money to Doctors Without Borders, International Rescue Committee, Save the Children, and UN High Commissioner for Refugees.
Already, the site has raised nearly $7 million of its $11 million goal, and the banner has only been live since yesterday. Keep it up, world.
Search giant Google is facing trouble in Russia. The country’s Federal Antimonopoly Service reportedly accused the company today of violating Russian antitrust laws. The agency found that Google is abusing its position in the market. The decision could force Google to change its current practices in the country and potentially face a fine.
Russian authorities initiated a probe of Google after domestic competitor Yandex filed a complaint in February, The Wall Street Journal reports. At issue is whether Google’s practice of bundling its own apps on Android phones constitutes anticompetitive behavior. “We believe the FAS’s decision will serve to restore competition on the market,” a Yandex spokesperson says.
The Journal says that FAS found Google guilty of “abusing its dominant market position” but not of “unfair competition practices. “We haven’t yet received the ruling,” a Google spokesperson said in a statement. “When we do we will study it and determine our next steps.”
The Russian investigation is not the only antitrust concerns facing the company overseas. In April, the European Union formally accused Google of antitrust violations. The question for the EU is whether Google uses its position as the dominant search engine to favor its own businesses, such as Google Shopping, over those of its competitors. The EU has also opened an investigation into whether the company uses its position to discourage carriers from bundling rivals’ applications on Android phones.
Google has responded to the EU’s initial claim by arguing that online shopping is more competitive than ever.
Google got a new logo today.
The new logomark is the company’s first major branding update in 16 years. It will preserve the famous blue-red-yellow-blue-green-red color sequence of the original one (the green letter was thrown in to purposefully break up the primary color pattern, because Google isn’t your ordinary tech company), but will lose the old-style serif typeface. The new logo is simpler, younger, friendlier, and—dare we say—more visually in line with Alphabet, Google’s new holding company.
It’s created with a font called Product Sans, a riff on schoolbook lettering style. But the overhaul doesn’t end with the word “Google.” There’s a microphone icon designed to make clear how voice interaction is working, and a four-color “G” logo for mobile that a few smart people have pointed out may be a lot of people’s primary association with Google going forward.
This is the real Google logo though, because it’s what will matter on mobile (and I like it!) pic.twitter.com/wAGVlMOc3Q
— Ben Thompson (@benthompson) September 1, 2015
Designers are predictably mixed on the change, so far. But the overarching message is clear: this is about Google growing outward, and designing a brand that can expand with it. “It’s really about much more than a logo and more about kind of a smart system,” says Geoff Cook, founding partner at Base Design. “Like an overarching visual language that really allows us the users to connect the dots across their ecosystem from product to product.”
Google has finally responded to antitrust charges filed against the company by the European Union last April.
The European Commission—the executive body of the EU—had been investigating whether Google has been disadvantaging rival shopping comparison sites by prioritizing results from its own Google Shopping service. It has also opened an investigation into whether the company uses its position as the dominant developer of mobile operating systems to discourage carriers from bundling applications from rival companies on Android-based devices. If Google is found guilty of violating EU law it could face fines of up to $6.4 billion—roughly 10 percent of the company’s operating revenue.
In a blog post today, Google general counselor Kent Walker wrote that online shopping is more competitive than ever, and that eBay and Amazon—not Google—are the main players and emphasized the importance of personalized advertising to Google’s business model and to the overall quality of the service. He did not address the EU’s concerns over Android.
“The universe of shopping services has seen an enormous increase in traffic from Google, diverse new players, new investments, and expanding consumer choice,” Walker wrote. “Google delivered more than 20 billion free clicks to aggregators over the last decade in the countries covered by the [European Commission’s statement of objections], with free traffic increasing by 227% (and total traffic increasing even more).”
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Chromebooks have made huge inroads in education—Google says they’re the best-selling computers in U.S. schools—and now the company is making a push into the office. Today it’s announcing a suite of new enhancements designed to make it easier to use Chrome OS at work.
These new tools make fleets of Chromebooks easier to manage, set up, and update. And there are new visualization features, so you can use legacy Windows apps if you need them. Google’s partnering with VPN companies, making printing easier, and making sure you can connect to all your networks no matter where you are.
Business is a hard nut to crack, and even Google admits this is just the first step down the road. The most immediately great new thing is the new Dell Chromebook 13, which occupies a virtually uncharted space in the Chrome OS universe: the mid-range. Starting at $399 and configurable up to $899, the Chromebook 13 has a 13.3-inch, 1080p screen, along with Intel’s Core i5 processor, and a dark gray magnesium-alloy body that looks and feels a lot better than your average bargain-basement Chromebook. It has a good, full-sized, backlit keyboard, and a very usable trackpad. Its battery should last 12 hours, a fact both Google and Dell executives proudly touted. It’s not quite the beauty the Chromebook Pixel is, but it looks very much like a computer you wouldn’t mind using. All for a third of the Pixel’s asking price.
It’ll be available September 17, and while Google might call it “a Chromebook for work,” the Dell Chromebook 13 appears to just be an awesome Chromebook for anyone.
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How many times have you want to boot up your Google Cardboard for some sweet VR action but that whole holding it thing got in the way? Well thankfully, there’s this new device from Hands Free Headgear that turns your head into a mount for any Google Cardboard viewer. It’s essentially the bones of a helmet that has been simplified to instead support and house your VR device.
It’s not the first time an incredibly simple solution has been made related to technology and cardboard, of course.
うし！！映画だwwww pic.twitter.com/xSRT3P7LTF
— ちーず (@hrhr_mumu) December 27, 2013
What will we think of next?
Ariel Zambelich/WIRED
A new version of Google Glass is on the way, and this time around, it will be offered exclusively to workplaces such as hospitals and factories.
The new device, called the Enterprise Edition internally, will look very much like the original but with the a new hinge and will sport a bigger display and faster processor, according to 9to5Google. The Wall Street Journal, which corroborates 9to5Google’s report, adds that the device can be attached to different glasses.
The device, overseen by Google’s Nest division, run by Tony Fadell, is expected to be available by fall, according to the Wall Street Journal. It will be at least a year before we see a new consumer version of the device.
As we’ve said, Google never gave up on Glass as an enterprise device, despite putting the consumer version of the device on hiatus, and indeed, the workplace is the ideal place for wearables. It’s one place that Glass has already had some success. In 2013, a California solar panel company had its field technicians wear Google Glass so they could take photos and view documents without using their hands. But Google will have to compete with other companies such as Vuzix, which have been selling head-mounted wearables to businesses for years.
Unites States Patent and Trademark Office
Google filed a patent today for a Glass-like wearable that records video and makes it searchable. If the gadget senses, through pre-programmed cues, that a significant moment is taking place, it will document the event and file the clip to the cloud for your future reference.
The patent doesn’t state that this new functionality is for Google Glass, but it does shows the processor and data storage mounted onto a Harry Potter–esque pair of spectacles. It could be a hint that Google is either reprising the troubled Glass’s potential as a consumer product or considering a separate tool geared toward Glass’ devotees in the medical and technical industries.
In a hypothetical scenario, Google imagines the glass being used by security personnel or airport screeners to review “the faces of all people that were seen between 1 P.M. and 3 P.M.” For the rest of us, it could be a neat lifelogging device—a means for capturing events accurately without removing yourself from the action. (You’d no longer have to fish out your smartphone, set up the composition, and press the record button.) But that has its drawbacks, too. Some people may not take kindly to being recorded without their explicit permission. Google Glass had a creepy-vibe problem, and these glasses, however school-marme looking, might not be an exception.
[View the story “@EricaJoy’s salary transparency experiment at Google” on Storify]
‘On mobile, the average [YouTube] session is now over 40 minutes.’
—Omid Kordestani, Google’s chief business officer, speaking during Google’s quarterly earnings call today.
In fact, Kordestani says that YouTube now reaches more 18 to 49-year-olds than any single US cable network. Those numbers sound insane, but keep in mind that they probably include people listening to music on YouTube, as well as views on tablets. Still, they represent an enormous shift in how we consume media.
New Google Chief Financial Officer Ruth Porat, who joined the company from Morgan Stanley in May, had a good first earnings call today. The company beat its projected revenues during its most recent quarter. More importantly, Porat was able to point to increased revenue in an area that has been a bugbear for Google in recent years: mobile.
During the call she said that the cost-per-click, or CPC, of mobile ads has risen and that desktop CPC has held steady. “We continue to close the gap between mobile and desktop search monetization,” she said during the call. That’s particularly good news since more Google searches happen on mobile devices than desktops in 10 countries, including the US.
Analysts projected earnings of $6.70 a share, which Google beat by 29 cents. Along with mobile, YouTube and Google’s programmatic advertising offerings such as Doubleclick also brought in meaningful money for the company.
Chief Business Officer Omid Kordestani credited local search as one of the main reasons for the company’s improved revenue in search. Some of that improvement was due to warmer weather compared to the first quarter: People aren’t doing as many searches for shopping or dining out when they’re snowed in. But he also pointed to some of Google’s new offerings that help businesses quantify offline sales that result from online searches—claiming, for example that one-third of Target’s mobile ads resulted in in-store sales.
Regardless of where the money came from, investors are pleased. Google shares surged more than 10 percent in after-hours trading.
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Google Isn’t Done Wringing Profits Out of Search Yet