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Alphabet Roundup: White House, India, Dataset Search, Mastercard

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The top news from last week was Alphabet’s (GOOGL - Free Report) absence from the Senate hearing.

White House Trouble

Adam Goldberg of Washington, D.C.-based communications firm Trident DMG said it best: “If you’re not at the table, you’re on the menu and Congress looks hungry.” True enough, “After investing so much in lobbying the last several years, this is bizarre."

At the Senate Intelligence Committee hearing, Congress wanted to talk to decision makers at technology companies and Google’s choice of Kent Walker, who is officially the company’s chief legal counsel and SVP of global affairs, wasn’t good enough, especially since others like Twitter (TWTR - Free Report) and Facebook (FB - Free Report) were sending their COOs and CEOs. The Senate wanted Page or at least Pichai, but these officers didn’t make an appearance and the empty chair marked Google spoke volumes.

The subject of regulating technology companies came up repeatedly during the hearing, but the government didn’t come to any conclusions.

In its defense, the company said, “We had informed the Senate Intelligence Committee of this in late July and had understood that he would be an appropriate witness for this hearing.” Moreover, Walker’s responsibilities have been increasing over time and at around the same time as the Senate’s call to appear, they were expanded to include overseeing of “trust and safety,” representing units that monitor security and abuse on its services.

Google seems to have gone to lengths to see that its top executives could avoid the hearing. Whether that was Pichai’s or Page’s call is something we won’t know. In the past, however, it was Schmidt and not Page that handled a lot of the government PR. The CEO function has always been used to focus on products instead.

So Walker submitted written testimony covering Google’s new guidelines for political ad disclosures and its measures to remove bad actors. Its efforts are supported by databases listing election ads on Google search, YouTube and across the web, a verification program and disclosure requirements on political ads. A new tool to prevent email phishing scams and a measure to protect political campaigns from cyber-attacks were also listed.

The efforts are similar to what other companies are trying and deliver on promises made at his last appearance, but Google’s inability to present itself will work against it. Particularly since Senator Mark Warner, who has the support of the Democratic Party’s biggest financers as a Presidential candidate, took it badly.

India Growth Plans

Google is doing all it can to hold its own in the prized India digital advertising market that is poised to grow 30% this year, according to media agency GroupM. That’s because of some very tough competition from Facebook, which is growing in leaps and bounds not only from its hugely popular social networking platform but also from its even more popular messaging service WhatsApp.

In fact, advertising buyer Magna estimates that the two companies together took a 68% share of the market and Reuters reports that there’s a good amount of internal concern over Facebook’s strong growth that will net $980 million in revenues this year. Google has been in the country forever but only managed a billion dollars last year.

There are a number of reasons for Google’s slower takeoff, the biggest factor being that until recently, the only way to get online was a PC and not many could afford that. Among those individuals and companies that did own PCs, Google had a high penetration rate.

Another factor was that for a search service to gain momentum, more businesses need to have an online presence that could somehow be indexed by Google. Until recently, most small businesses didn’t see any benefit in this, because it couldn’t have helped them reach more people. That scenario is changing rapidly.

The third factor is education/literacy, the level of which varies significantly across the country and of course you need a relatively more educated/literate group of people to search for things online.

A fourth factor is language/script, of which there are around 20 although a large section understands either English or Hindi or both (a subset of this group won’t be able to read the Hindi script).

This means that an ad campaign is more effective and far-reaching when it uses rich media, especially video. Alternatively, ads can be tailored to target customers based on the state in which they reside.

Google is trying these options in a renewed attempt to crack the market. Its head of "Next Billion Users" initiative, Caesar Sengupta has said at the "Google for India" event in New Delhi that "India is the most important market for the 'Next Billion Users' initiative.” Pichai’s emerging markets strategy involving more services tailored to locals; more marketing on radio, billboards and TV; more local staff; and start-up investment will also play an important role.

Given the above, it’s clear that YouTube will also play an important role, which is probably why the company is bringing its first “Originals” catered to the Indian market with a show called ARRived based on famous singer A R Rahman.

According to YouTube India Head of Entertainment Satya Raghavan, "Affordable data costs are driving video consumption in India, data usage is about 8 GB a month per subscriber. This has pushed online video consumption as well, which is now about 75% of all mobile traffic as per industry reports."

ComScore says that the first half of this year saw Indian users spending more time using Google services than Facebook, an improvement from last year when the opposite was the case. Google’s initiatives in the region can spur this trend even as Facebook sees increasing regulatory hurdles.

Dataset Search

Google has grown over the years by connecting data to the people that need it. So on the one hand, it has been organizing that data while on the other, it has been studying customers to understand their needs better.

This led it to develop a new kind of search service called Dataset Search, which is basically an attempt to organize the world’s datasets to make them more accessible. The service is still in beta.

While academics, journalists and data scientists are likely to find the data most useful, there’s still a large number of others that are increasingly getting online to increase our knowledge on things or verify popular beliefs. Google is starting off with on weather, environment, social sciences and some other genres gleaned from publishers’ sites, digital libraries and authors’ personal web pages. Usage rates will likely spur additions to these going forward.

Data providers will however have to make their data more search engine friendly and also show some credentials including details on who created the data, when it was published and how it was collected, to make the service more reliable. After indexation by Dataset Search, it will be integrated with information from Google’s Knowledge Graph.

Mastercard Deal

It was recently reported that Alphabet entered into a data sharing arrangement with Mastercard (MA - Free Report) that neither company bothered to tell users about. The companies have since said that no data was personally identifiable and was only shared on an aggregate basis with advertisers to give them an idea of the effectiveness of their digital advertising campaigns.

With the arrangement, Google offers advertisers insight into in-store sales that are driven by a digital campaign by linking the sales that close within 30 days of clicking an online ad. It of course works only when a Google partner like Mastercard processes the sale in case of users that are signed into their Google accounts at the time (Google doesn’t turn off location tracking even when disabled by the user).

While privacy organizations have raised a flag on the issue, more comprehensive tracking by companies like Google and Amazon is already on the way, packaged in user benefits for maximum effect. So Mastercard has a deal with these companies to integrate Masterpass (a system that allows seamless online payments through uploaded credit card details) with Google Assistant and Alexa to facilitate payments through voice commands.

This was probably a reaction to Apple Pay that is stealing the bread and butter of traditional payment processors and in case of the tech companies, a way to compete with the advantages that Apple’s (AAPL - Free Report) closed ecosystem provides. Privacy be damned.

Pichai Sells Shares

Google’s CEO Sundar Pichai sold 10,000 GOOG shares, netting him $11.9 million. The CEO appears to be taking in some profits, much the same as Microsoft’s Nadella did recently.

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