Displaying items by tag: Google
Apple in hot water over Google’s antitrust case
The US Justice Department has filed (yet another) antitrust lawsuit against Internet behemoth Google and it could have major repercussions for Apple. It is estimated that Google pays Apple between $8 billion to $12 billion a year to be the default search engine on Apple’s devices and soon it may all come to a head.
The scrutiny of the deal, which was first agreed 15 years ago and has rarely been discussed by either company, has highlighted the special relationship between Silicon Valley’s two most valuable companies —‘an unlikely union of rivals’ that regulators say is unfairly protecting its monopoly and preventing smaller companies from flourishing.
The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives.
The lawsuit describes that the relationship's evolution from Google being the default search engine on Apple's Safari browser in 2005 in exchange for ad revenue to a broader agreement that included iPhones and later Apple's assistant Siri. "Today, Google's distribution agreement with Apple gives Google the coveted, preset default position on all significant search access points for Apple computers and mobile devices," the Justice Department stated.
While the deal is nice for Google - which sees about 50% of its searches originate from Apple devices, it is much more lucrative for Apple considering that the payments are purely profit. This is believed to be the single biggest payment Google makes to anyone, and it is estimated to account for 15 to 20 percent of Apple's annual profits.
"There is a risk, if you play it out, that there actually could be more financial impact to Apple than there is for Google," Toni Sacconaghi, an analyst for Bernstein, told The Wall Street Journal in an article, estimating that Apple stock could decline as much as 20% if the agreement with Google is dissolved.
If we estimate that payments from Google stood at about $10 billion in the fiscal year ‘19 and Apple had to forgo the entire amount, services revenues would be lower by about 22% with total revenues lower by about 4%. The impact on Apple’s profits would be much more evident as it likely incurs no costs to earn these revenues.
However, the Financial Times reported that Apple is stepping up efforts to develop an alternative to Google search. In a small change to the newest model of the iPhone working system, iOS 14, Apple has started to point out its personal search outcomes and hyperlink on to web sites when customers sort queries from its house display.
That internet search functionality marks a necessary advance in Apple’s in-house improvement and provides an alternate if regulators block its profitable partnership with Google. Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department, so the prospect of losing the Apple deal has been described as a “code red” scenario inside the company.
The landmark lawsuit, which follows a 16-month investigation by the House of Representatives' judiciary committee, is a part of a broader regulatory push against big tech. However, it remains unclear which of the Silicon Valley companies will prove more vulnerable to mounting regulatory pressure.
Oracle v Google: the software copyright case of the decade
Ten years after Oracle first sued Google over the code used in its Android platform, the two tech giants are finally facing off in the Supreme Court.
The dispute concerns about 11,500 lines of code that Google used to build its popular Android mobile operating system, which were replicated from the Java application programming interface developed by Sun Microsystems – a wholly owned subsidiary of Oracle since 2010.
Oracle sued Google shortly afterward, arguing that the company’s use of the code violates its ownership rights. Google, on the other hand, has said the code it copied was purely functional, and that its own engineers authored all of Android’s code that could be said to be creative and subject to copyright protection.
Not only are billions of dollars at stake but also the law of copyright in the internet era, and which types of code will be subject to protection. The blockbuster dispute is sure to capture the attention of Silicon Valley as it could have far-reaching consequences for the future of software innovation.
Where did it all begin?
Oracle v Google is an ongoing legal case dating back to 2010. The dispute centers on the use of parts of the Java programming language's application programming interfaces (APIs), which are owned by Oracle, within early versions of the Android operating system by Google. Google has admitted to using the APIs, and has since transitioned Android to a copyright-unburdened engine, but argues their original use of the APIs was within fair use.
Oracle initiated the suit arguing that the APIs were copyrightable, seeking US$8.8 billion in damages. While two District Court-level jury trials have found in favor of Google, the Federal Circuit court has reversed both decisions, asserting APIs are copyrightable and Google's application of them failed a fair use defense. Google successfully petitioned to the Supreme Court to hear the case in the 2019 term, focusing on the copyrightability of APIs and subsequent fair use. This ruling is currently being reviewed by the Supreme Court.
What’s happening now?
The difficulty of this case is that the world is very different now to what it was when the case was filed a decade ago.
Both companies have changed hands — the lawsuit began while Larry Ellison was still at the helm of Oracle and Eric Schmidt was the CEO of Google. Similarly, three Supreme Court seats have been vacated since the last time Google asked the high court to review its case; one justice has retired and two have passed away — most recently, Justice Ruth Bader Ginsburg.
The trial, held this week via teleconference, intends to explain programming to a non-technical jury who will subsequently set precedent for the future of copyright law.
Google lawyer Thomas Goldstein told the justices that the disputed Java code should not receive copyright protection because it was the “the only way” to create new programs using the programming language. “The language only permits us to use those,” Goldstein said.
Chief Justice John Roberts suggested Google still should have paid Oracle for a license to Java. “Cracking the safe may be the only way to get the money that you want, but that doesn’t mean you can do it,” Roberts said.
Justice Neil Gorsuch questioned Goldstein on whether Google had simply piggybacked on Oracle’s innovation. Gorsuch asked, “What do we do about the fact that the other competitors, Apple, Microsoft ... have, in fact, been able to come up with phones that work just fine without engaging in this kind of copying?”
Google has said the shortcut commands it copied into Android do not warrant copyright protection because they help developers write programs to work across platforms, a key to software innovation.
Court observers found that while the Justices seemed to side with Oracle on the copyright arguments, they also took deference to the arguments presented by Microsoft, who had taken Google's side on the case. Microsoft argued in an amicus brief that ruling in Oracle's favor could upend the software industry.
Several justices noted how consequential a decision in the case could be. “I’m concerned,” Justice Samuel A. Alito Jr. told a lawyer for Google, “that, under your argument, all computer code is at risk of losing protection.”
What impact will the outcome have?
The case is of significant interest within the tech and software industries, as numerous computer programs and software libraries, particularly in open source, are developed by recreating the functionality of APIs from commercial or competing products to aid developers in interoperability between different systems or platforms.
If this ruling is allowed to stand, it is believed that companies will be forced to implement deliberately incompatible standards to protect themselves from the risk of complex litigation, moving away from the current trends in software development which have focused on improving interoperability between different services allowing apps to communicate with one another, creating more integrated platforms for end users.
Several of the court’s conservatives, including Justices Brett Kavanaugh and Samuel Alito, noted that Google’s allies had warned that the “sky will fall” if Oracle won.
“We are told if we agree with Oracle we will ruin the tech industry in the United States,” Roberts said at one point to Malcolm Stewart, a Justice Department attorney who represented the United States and argued in favor of Oracle.
It is clear that the Supreme Court is divided over this landmark case. Some of the eight justices expressed concern that Google simply copied Oracle’s software code instead of innovating and creating its own for mobile devices. Others emphasized that siding with Oracle could give software developers too much power with potentially harmful effects on the technology industry.
A ruling is expected by the end of June.
What happened to Google and Facebook’s subsea cable plans?
Following security concerns from US officials, it has been announced that Google and Facebook have scrapped plans for a giant subsea cable from Los Angeles to Hong Kong.
The Pacific Light Cable Network (PLCN) was first announced in 2016, with backing from Google, Facebook and other companies including Pacific Light Data Communication and TE SubCom.
The PLCN is a high-capacity fiber-optic undersea cable running for approximately 12,800km under the Pacific Ocean between Hong Kong and Los Angeles. In 2016, Google said that the PLCN would have an estimated capacity of 120TB per second, making it the highest capacity trans-Pacific route.
“In other words, PLCN will provide enough capacity for Hong Kong to have 80m concurrent HD video conference calls with Los Angeles,” the company said at the time.
The 12,800 km long cable has already been laid, costing hundreds of millions of dollars. However it needs permission from the US Federal Communications Commission (FCC) in order to operate.
Breakdown of plans
A US government committee, known as Team Telecom, raised concerns about Dr. Peng Telecom and Media Group’s involvement, citing its "relationship with Chinese intelligence and security services".
While Google and Facebook can be considered the most high-profile stakeholders, much of the cable’s fiber optics belong to Pacific Light Data Communication, which is owned by Dr. Peng Telecom.
In light of these concerns and the delays they were causing, Google sought permission from the FCC to activate only the self-owned portions of the subsea cable network in February 2020, effectively cutting Pacific Light Data Communication from the project.
In April of this year, Google were awarded temporary authority for construction and testing. The FCC said it would allow the company to operate the segment of cable between the US and Taiwan – but not Hong Kong – for six months, pending a final disposition of the license application.
However, as tensions between the US and China continue to grow, it became increasingly likely that US officials would reject the use of the cable on the grounds of national security.
What’s happening now?
While the special temporary authority wasn’t due to expire until the end of September, Bloomberg reported a few weeks ago that Google and Facebook have dumped their original plans for a subsea cable between the US and Hong Kong.
Instead, the companies submitted a revised proposal that incorporates the links to Taiwan and the Philippines, but crucially leaves out Hong Kong-based Pacific Light Data Communication.
A spokesperson for Google told the BBC: “We can confirm that the original application for the PLCN cable system has been withdrawn, and a revised application for the US-Taiwan and US-Philippines portions of the system has been submitted.
“We continue to work through established channels to obtain cable landing licenses for our undersea cables.”
While the fight to use the PLCN drags on, Google also announced in July of this year that it is building another subsea cable, named the ‘Grace Hopper’ cable, connecting the UK, US and Spain.
The cable marks Google’s first investment in a private subsea cable route to the UK and its first ever route to Spain. Today, 98pc of international internet traffic is carried around the world by subsea cables.
Nokia phone maker HMD Global raises $230 mln investment from partners
HMD Global, the maker of Nokia brand phones, announced it has raised USD 280 million in new financing from investors including Google, Qualcomm and Nokia. The money will go to strengthening its product offering, including 5G devices and new services, and expanding in new markets, such as Brazil, India and Africa.
The company announced four areas where it plans to invest. First, is affordable 5G smartphones, "with an emphasis on strong partnerships with US carriers".
Second, HMD Global will further transition to digital-first offerings as part of a new post-COVID reality, as well as more consumers buying their phones from internet sellers.
Third, the company plans to expand its presence in key growth markets. This includes the recently introduced operations in Brazil, as well as Africa and India.
Fourth, the investment will help the business strengthen its position beyond hardware and into a "holistic mobile service provider".
This year alone, HMD Global launched its international data roaming service HMD Connect, enhanced its mobile cybersecurity capabilities with the acquisition of Valona Labs assets, and started developing its own software, security and services with a new research and development centre in Tampere, Finland.
It last raised external funds with a USD 100 million round in mid-2018. HMD first started selling Nokia phones in 2016 and has since expanded to 91 markets and shipped over 240 million phones.
Google earnings hit by ‘significant slowdown’ in ad sales
Google parent Alphabet has reported a slowdown in first-quarter revenue growth, as the Covid-19 pandemic led to a drop in advertising on the search engine from March. Revenues rose 13 percent year-on-year to USD 41.2 billion, down from 17 percent annual growth a year earlier and in Q4.
The US giant exceeded dim earnings expectations, showing higher revenue and profits despite a coronavirus-induced slowdown in its core advertising operations. Alphabet shares leapt more than eight percent in after-hours trades following release of earnings figures that eased fears the pandemic would stall the internet firm's income engine.
Alphabet reported a profit of $6.8 billion in the first three months of the year, up nearly three percent from last year, on revenue that grew 13 percent to $41 billion. The Silicon Valley giant, the first of the big technology firms to report quarterly results, offered a mixed picture: a strong start to the year followed by an abrupt slowdown in advertising in March and some tentative signs the worst may be over.
Chief financial officer Ruth Porat pointed to "very early signs of recovery in commercial search behavior by users" but added that "it is not clear how durable or monetizable this behavior will be."
Still, the report showed one of the major tech firms weathering the crisis and seeing some hopeful signs in advertising, which represents the lion's share of Alphabet revenue and is closely tied to economic conditions.
"In a quarter of bad news, this was really good news," said analyst Rob Enderle of Enderle Group, who predicted improvement in the digital ad market in May and June.
Baird analyst Colin Sebastian expected the current quarter to be "the bottom" of an online advertising trough at Alphabet, while noting growth in its YouTube and cloud computing revenues.
"This is probably exactly what technology needed at a time when many suspected FANG/Tech could be rolling over," Mark Newton of Newton Advisors said in a tweet, referring to the acronym for the big tech firms Facebook, Amazon, Netflix and Google.
Alphabet executives remained cautious in their outlook, noting that the company is cutting back on hiring, marketing, office expansion and other expenses while continuing to invest in promising long-term trends like companies moving more aggressively to services hosted in the internet cloud.
"It is now clear that once the emergency has passed, the world will not look the same," Alphabet-Google chief Sundar Pichai said during an earnings call.
"Some social norms will change, and many businesses are speaking to us looking to reinvent their operations."
Google services, data centers, and software capabilities are positioned to help with trends in online education, healthcare, entertainment, and shopping likely to continue after the pandemic has ended, according to Pichai.
Overall ad revenues for Google rose 10 percent for the quarter despite the pandemic's worsening in March.
YouTube's ad revenue was up about a third to $4 billion as people turned to online entertainment while they hunkered down at home to avoid the coronavirus.
The pandemic has disrupted operations at tech powerhouses known themselves for disrupting traditional business models.
Fewer people are buying new smartphones; more people are online and using social platforms but online advertising is slumping; cloud computing needs are growing; and more consumers are relying on delivery of essential goods from Amazon.
Along with other tech firms, Google has been highlighting its role in helping consumers and authorities in the battle against COVID-19.
Pichai said that "we've marshaled our resources" to assist people during the crisis.
"Given the depth of the challenges so many are facing, it's a huge privilege to be able to help at this time," he said.
Google has teamed up with longtime rival Apple to develop technology for coronavirus smartphone "contact tracing" by allowing devices from the two platforms to communicate and indicate when people have crossed paths with an infected person.
YouTube said it began adding fact-check panels to search results in the US for videos on hot-topic claims shown to be bogus.
The report showed revenue rose 26 percent to $170 million for Alphabet's "other bets" which include the Waymo self-driving car project, Wing drone delivery and Verily life sciences. But these "moonshot" projects produced a collective operating loss of $1.1 billion.
Orange lands Google’s transatlantic cable
Orange proceeded to land Google’s transatlantic Dunant cable in Saint-Hilaire-de-Riez, in the Vendée region of France, first and terrestrial stage of the laying of this cable.
This new 6,600 km long submarine cable linking the United States to France, posed by the company SubCom and scheduled to come into service before the end of 2020, is the result of a project combining Orange and Google. The Europe-United States axis is one of the most important submarine routes in the world with a need for connectivity that doubles every second year. Dunant will help to meet the explosion in Internet usage and guarantee ever more efficient connections for Orange and Google customers.
As the “Landing Party” and owner of the French part of the cable, Orange has completely refurbished the historic station in Saint-Hilaire-de-Riez, which was no longer in use, to house the terminal equipment for the Dunant system. This area is a strategic location, close to the main connectivity hubs on this side of the Atlantic. From this landing station, Orange is deploying terrestrial optical fibers in France between Saint-Hilaire-de-Riez and Paris to route its traffic on the Dunant cable to the capital's major data centers and will also provide service to the rest of Europe and major international data centers.
With this deployment, Orange will benefit from two pairs of optical fibers with a capacity of up to 30Tbp/s each, enough to transfer a 1GB video in 30 microseconds. Orange will thus be able to meet the massive growth in demand for data and content exchanged between Europe and the United States for several years to come.
Dunant will be the first submarine cable to connect the United States to France in more than 15 years and will be designed to combine the most advanced technologies from the world's various equipment suppliers. The cable will therefore be able to keep pace with innovation in optical transmission technologies and maintain its performance at the highest level for many years to come.
As a major investor in more than 40 submarine cables, Orange is committed to developing the quality of service of its global network. This new transatlantic project is one of the Group's many operations aimed at providing high-quality services to support its customers in their various uses.
Alphabet shares fourth quarter earnings, YouTube revenue revealed
Google’s parent company, Alphabet, reported its fourth-quarter and full-year financial results. The company’s revenue grew from $39.3 billion in 2018 to $46.1 billion in 2019. The firm’s net income also expanded from $8.9 billion to $10.7 billion over the same time frame.
However, the figures, when compared to expectation, were mixed. Alphabet missed revenue expectations in the fourth quarter despite stellar growth at YouTube and in the cloud, earnings figures showed.
Detailing its cloud computing and YouTube revenues for the first time, Alphabet reported that profits rose 19 percent from a year ago in the quarter to nearly $10.7 billion as revenues increased 17 percent to $46 billion.
The company said its cloud computing services took in $2.6 billion in revenue during the last three-month period, up more than 50 percent and nearly $9 billion for the year.
Alphabet and Google chief executive Sundar Pichai touted YouTube as a revenue star at the company, with ad revenue reaching $15 billion last year in an increase of about 36 percent from 2018. YouTube music and television premium services now have more than 20 million paid subscribers, according to Pichai.
Despite assurances by executives that Alphabet sees plenty of money-making potential ahead and is investing to capitalize on long-term trends, Alphabet shares slipped more than four percent in after-market trades that followed release of the earnings figures.
The California tech giant, which dominates online search and makes the Android mobile operating system, has been working to reduce its dependence on the digital advertising which delivers most of its cash.
"Our investments in deep computer science, including artificial intelligence, ambient computing and cloud computing, provide a strong base for continued growth and new opportunities across Alphabet," said Pichai.
Chief financial officer Ruth Porat said Alphabet will ramp-up hiring this year. Much of that will be engineering talent for its cloud division which competes with cloud market-leaders Amazon and Microsoft.
"We are leaning into investing for long-term growth," Porat said. "That has been a key principle here and continues to be," she added.
Google advertising took in the majority of revenue at $38 billion in the quarter, and more than 80 percent of its annual revenues of $162 billion. Colin Sebastian, an analyst at Baird, said the earnings report showed "a deceleration" in growth for Google, which may have been due to the impact of fewer holiday shopping days.
Analyst Nicole Perrin at eMarketer said the results highlight the significance of YouTube, the popular video service for which Alphabet had not up to now disclosed financial data.
"This is something investors have been looking for, but the information should also give advertisers valuable information about the importance of YouTube as a digital ad vehicle," Perrin said.
"YouTube is growing strongly according to this report, and revenues are above where eMarketer had thought they were."
Google’s founders step back from top roles
Google founders Larry Page and Sergey Brin have announced they are stepping down from top roles at the online giant's parent company, Alphabet.
Huawei Mate 30 users won't have access to Google apps
Huawei's upcoming flagship Mate 30 smartphone will launch next month without key Google apps, creating a challenge for the Chinese tech giant hit by US sanctions.
French consumer group presses charges against Google for privacy invasion
A French consumer rights group said that it has launched a class action lawsuit against US tech giant Google for violating the EU's strict data privacy laws.