Google’s quarterly revenue disappoints Wall Street

Google’s G logo on a swag bag


Stephen Shankland/Techhnews

Google may have faced the toughest stretch in its 20-year history this past quarter.

The search giant fended off accusations of conservative bias from prominent Republicans, including President Donald Trump. CEO Sundar Pichai faced intense scrutiny over reports of Project Dragonfly, a secretive initiative aimed at building a censored search engine for China. And the company was criticized for its handling of data, security and privacy — and said it’s shutting down Google+ social network after it was forced to disclose that a bug had exposed user information for two years.

Add one more question to the list: Alphabet, Google’s parent company, didn’t pull in as much revenue as expected, according to its latest earnings report on Thursday. Third-quarter profits of $9.19 billion outdid expectations — but Wall Street saw the glass as half empty.

Alphabet tallied $33.74 billion in sales, a 21 percent increase that nevertheless missed analyst estimates of $34.05 billion for the third quarter. Earnings per share were $13.06. Analysts on average had expected $10.40 per share.

The company’s stock fell 3.6 percent percent to $1,056.10 in after-hours trading. 

“Our revenues continued to benefit from ongoing strength in mobile search with important contributions from YouTube, cloud, and desktop search,” said Ruth Porat, Alphabet’s chief financial officer, on a conference call with financial analysts.

The earnings come in the midst of a rough patch as Google grapples with repercussions from its scale and influence two decades after Sergey Brin and Larry Page founded the company. Most recently, Google has been roiled by reports about Dragonfly, eight years after initially pulling its search engine out of China. At the time of its departure, Google co-founder Sergey Brin, who grew up in the Soviet Union, cited the “totalitarianism” of Chinese policies.

Google’s workforce also is criticizing the rumored search project. A handful of employees reportedly quit over the initiative and about 1,000 workers signed an open letter asking the company to be transparent about the project. That includes creating an ethics review process for its efforts in China that includes rank-and-file employees, not just high-level executives.

Google has been mostly quiet about the project. Last month, Keith Enright, Google’s chief privacy officer, confirmed during a hearing with the Senate Commerce Committee that there is indeed a Project Dragonfly, but he wouldn’t elaborate.

This is a developing story…

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