Tencent Securities News according to the New York Times, not all companies can take a fine of 2.7 billion US dollars seriously, but Alphabet, Alphabet Inc-CL C's parent company, can, only attach this 2.7 billion US dollars as a footnote in the quarterly report.
The second-quarter results released on Monday are both an opportunity and a challenge for Alphabet. On the one hand, Alphabet's Alphabet Inc-CL C search engine has obvious advantages, a variety of Internet services and smartphones are developing rapidly, and YouTube video business has not been greatly affected by a boycott by advertisers. On the other hand, despite the good performance of the business, Alphabet has encountered a non-business-related problem.
Us technology giant faces a number of EU charges
The European Commission last month imposed a record $2.7 billion fine on Alphabet Inc-CL C, a subsidiary of Alphabet, for Alphabet Inc-CL C's "illegal practice" of favouring his own shopping advertisements. A month after the incident, the US Democratic Progressive Party proposed the need for stricter antitrust regulation of large companies. Cory Booker, a member of the Democratic Progressive Party of New Jersey, told the US technology website Recode that antitrust regulators should investigate Alphabet Inc-CL C.
The European Commission said that if Alphabet Inc-CL C does not carry out rectification within 90 days, it will face a higher fine. Ruth Porat, Alphabet's chief financial officer, said in a phone call with investors that it was too early to analyze how the company would respond to the EU ruling. Alphabet said the company was considering an appeal.
Alphabet Inc-CL C also faces two other antitrust investigations in the EU over his Android operating system and advertising services, which operate on 80 per cent of the world's smartphones. Alphabet Inc-CL C denies both charges.
Royal Bank of Canada Capital analyst Mark Mahaney said in a survey report last week that if Alphabet degrades the quality of search results to please regulators, the company may face the risk of losing users.
Disgraced financial reporting has no real impact.
Huge fines from the European Union caused Alphabet's second-quarter earnings to hit a two-year low, with net profit falling 28% to $3.52 billion. Excluding the fine, the company's net profit will rise by 28%. Earnings per share were $5.01, up 21% from analysts' expectations of $4.49, and total revenue rose 21% to $26.01 billion in the quarter.
Although Alphabet's shares fell about 3% in after-hours trading after the earnings announcement, they rose to near an all-time high during normal trading hours on Monday and broke the $1000-per-share mark.
The EU punishment humiliated Alphabet Inc-CL C's sustained and stable financial results, but did not pose a real threat to Alphabet Inc-CL C's business. The dominance of Alphabet Inc-CL C search is still unshakeable, and advertisers are keeping an eye on the "fat meat" of their search ads, and the price of Alphabet Inc-CL C search ads on smartphones has also risen.
Alphabet said that the paid click-through rate of Alphabet Inc-CL C search and YouTube video sites (Alphabet Inc-CL C charges advertisers according to the number of user clicks) increased 61% compared with the same period last year, making up for the loss caused by the decline in its web advertising fees.
YouTube Advertising Business develops rapidly
YouTube video also has another growth opportunity. Alphabet said YouTube faced a boycott by major advertisers because some ads appeared next to violent videos on the page. Even so, the company's total revenue is growing rapidly. YouTube says the company has given advertisers more autonomy to decide where their ads appear.
The development of YouTube is irresistible. Alphabet says YouTube has 1.5 billion monthly visitors and spends an average of 60 minutes a day on mobile phones and tablets. Alphabet has also introduced new advertising models, including 6 seconds before the start of the video. While the video business is becoming more important to Alphabet, Platt believes that the company has no other projects to surpass the video business.
Alphabet announced on Monday that Sandal Sundar Pichai, former chief executive of Alphabet Inc-CL C, would be appointed head of Alphabet's board of directors. He is also the 13th board member of Alphabet and the fifth CEO of the company with a board seat. (compiled by Ping Pigeon / proofread by Zhu Yi)