|Day's Range||289.69 - 289.69|
Google is announcing the global availability of Swirl, an ad format the company unveiled in beta just over a year ago. The Swirl format involves banner ads that include interactive 3D product models. Swirl lets consumers engage with a product like it's right in front of them by allowing them to rotate, zoom and expand the creative in the ad.
After reportedly spending a year and a half working on a cloud service meant for China and other countries, Google cancelled the project, called “Isolated Region,” in May due partly to geopolitical and pandemic-related concerns. Bloomberg reports that Isolated Region, shut down in May, would have enabled it to offer cloud services in countries that want to keep and control data within their borders. According to two Google employees who spoke to Bloomberg, the project was part of a larger initiative called "Sharded Google" to create data and processing infrastructure that is completely separate from the rest of the company’s network.
The AI-powered analytics company's share price has soared by more than 250% over the last three years.
Warren Buffett, after giving away a $2.9 billion gift this week, has seen his wealth drop below Google co-founders Larry Page and Sergey Brin as well as former Microsoft CEO Steve Ballmer.
Tesla CEO Elon Musk reiterated that the world's newly crowned most valuable automaker could develop a fully self-driving car by 2020.
Google may be able to stave off a full-scale EU antitrust investigation into its planned $2.1 billion bid for Fitbit <FIT.N> by pledging not to use Fitbit's health data to help it target ads, people familiar with the matter said. The deal announced in November last year allows Google, a unit of Alphabet <GOOGL.O>, to take on Apple <AAPL.O> and Samsung <005930.KS> in the fitness tracking and smart watch market, alongside others including Huawei and Xiaomi <1810.HK>. Apple is the leader in the global wearables market with a 29.3% market share in the first quarter of 2020, followed by Xiaomi, Samsung and Huawei, according to data from market research firm International Data Corp. Fitbit's share of the market was 3%.
Alphabet Inc.’s Google (GOOGL) has secured a major boost for its Google Cloud division with a multi-year agreement to house Renault SA’s (RNLSY) manufacturing data.In a report by Bloomberg on July 9, the deal will have Google providing its cloud-computing capabilities to the French automaker’s various manufacturing divisions. Both businesses have not disclosed the deal’s amount nor the specific length of the agreement but Alphabet refers to the contract as the “largest of its kind globally” and its first deal for Google Cloud in France.Google Cloud CEO Thomas Kurian said in an interview, “We believe that manufacturing companies need a new platform to complement the assembly lines, the supply chains and other systems they already have.” He added, “The Renault contract offers a chance to improve manufacturing processes, industrial automation and adapted controls.”Kurian said that the agreement will have no overlap with Alphabet’s advertising unit and self-driving division Waymo. Additionally, he assured that no data will be going to the search giant’s other units.Renault Director of Manufacturing and Logistics José Vicente de los Mozos stated, “This agreement and the commitment of our IT teams will allow us to accelerate the deployment of our Industry 4.0 plan designed to transform and connect our production sites and logistics processes around the world to improve our standards of excellence and performance.”Adding the automaker to its cloud computing clientele represents another recent win for the Google Cloud portfolio. On July 8, GOOGL forged a 10-year agreement with Deutsche Bank AG (DB) to provide its enterprise-level services. Germany’s largest lender is the third client that the company will be servicing from the financial sector.Monness analyst Brian White on July 6 reiterated a Buy rating on GOOGL and a price target of $1420 (implying 6% downside) but cut Q2 earnings estimates, noting the growing global privacy initiatives along with the spread of COVID-19.On July 7, Needham analyst Laura Martin lowered the company’s Q2 revenue after the market research company, eMarketer projected that Google-search revenue will decline in 2Q and 2020. Martin said, “We lower our Alphabet Q2 revenue estimate down to 7% year-over-year.” She assigned a Buy rating on Alphabet’s stock and a price target of $1800 which implies 20% upside.Google is up 12% year-to-date with 28 analysts assigning Buy ratings, 2 with Hold ratings, and no Sell ratings which altogether results in a Strong Buy consensus. The average analyst price target stands at $1531.50 suggesting 2% upside potential. (See Google’s stock analysis on TipRanks).Related News: Intel Capital Snaps Up $255M Stake In India’s Jio Platforms Apple Doubles Down On 5G iPhone Mass Production- Report Apple’s Integrated Ecosystem Takes the Cake, Says Top Analyst More recent articles from Smarter Analyst: * Bed Bath Drops 9% In Pre-Market As Sales Sink 49%; Merrill Lynch Raises PT * Apple Reassures On Intel’s Thunderbolt Despite Chip Departure * Costco June Sales Beat Estimates As Shoppers Go Online; Top Analyst Raises PT * AstraZeneca’s Wins FDA Priority Review For Heart Drug Brilinta
(Bloomberg) -- Tesla Inc.’s Elon Musk said the carmaker is on the verge of developing technology to render its vehicles fully capable of driving themselves, repeating a claim he’s made for years but been unable to achieve.The chief executive officer has long offered exuberant takes on the capabilities of Tesla cars, even going so far as to start charging customers thousands of dollars for a “Full Self Driving” feature in 2016. Years later, Tesla still requires users of its Autopilot system to be fully attentive and ready to take over the task of driving at any time.Tesla’s mixed messages have drawn controversy and regulatory scrutiny. In 2018, the company blamed a driver who died after crashing a Model X while using Autopilot for not paying attention to the road. Documents made public last year showed the National Highway Traffic Safety Administration had issued multiple subpoenas for information about crashes involving Tesla vehicles, suggesting the agency may have been preparing a formal investigation of Autopilot.Read more: Businessweek’s October 2019 cover story on Tesla AutopilotWhile other self-driving developers have tempered expectations for when their technology will be ready for deployment, Musk is undeterred. He said in a prerecorded video played Thursday during the World AI Conference in Shanghai that Tesla is “very close” to level five autonomy, meaning its cars won’t require human intervention.“I remain confident that we will have the basic functionality for level five autonomy complete this year,” Musk said. “I think there are no fundamental challenges remaining for level five autonomy. There are many small problems, and then there’s the challenge of solving all those small problems and then putting the whole system together, and just keep addressing the long tail of problems.”Shares of Tesla rose as much as 3.1% to $1,408.56 in early New York trading on Thursday.Musk’s view contrasts with Alphabet Inc.’s Waymo, which recently acknowledged it will be relying on human safety drivers to back up its robotaxis for many years to come. General Motors Co.’s Cruise last year backed off plans to make autonomous vehicles available for hailing rides and hasn’t set a new timetable for when such a service will be ready.Related: The State of the Self-Driving Car Race 2020Musk, 49, has repeatedly described autonomous driving as transformative for Tesla. He’s not alone in this sense: Cruise CEO Dan Ammann has estimated there will be a $1 trillion addressable market in the U.S. for autonomous ride hailing.During Thursday’s video, Musk said that original engineering on Tesla technology is an important facet of the company’s operations in China, which are anchored by its massive new factory near Shanghai.(Updates with shares in sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
With people now preferring to work remotely due to growing number of coronavirus cases, investments in the cloud space have increased.
Fitbit (NYSE: FIT) is a household name in the fitness market thanks to its simple but effective exercise-activity trackers. With a roster of products including smart watches and wristband activity trackers, Fitbit's offerings record health metrics including heart rate, distance travelled, and steps walked. Most of Fitbit's activity trackers cost between $100 and $175; the company's most recent tracker, the Fitbit Charge 4, cost $149 upon its release in March.
The attraction of smaller cities has been growing. Whether you're just starting out, making a career change, or planning retirement, one of these cities just might fit the bill.
(Bloomberg) -- About a year ago, Zerius Zontay discovered that his family’s work was no longer appearing on YouTube Kids. He and his wife, Symphony, regularly post short clips on the giant video-sharing site, featuring their three sons, who play with toys, sing songs and joke around. Zontay wanted to get their clips back on YouTube’s app for kids, a destination where the video site tries to direct viewers who are under the age of 13. For months, Zontay lobbied YouTube, repeatedly sending emails to community managers, to no avail. Then, in June, as protests against police misconduct spurred a national conversation on race, his frustration simmered over. “I’m seeing YouTube promoting Black Lives Matter, but with the Kids app, they’re showing that certain kids don’t matter,” said Zontay, a former music teacher. “You scroll for a long, long, long, long time before you get to a Black face.”In recent years, YouTube has come under intense pressure for how it handles kids content, both for letting too many underage people use YouTube’s main site and for allowing harmful programming in the Kids app. In 2017, YouTube published a “Field Guide for Creating Family Content,” and began restricting more types of programming from appearing in the app. Last year, the Zontays’ channel disappeared from YouTube Kids at a time when the video site was removing thousands of channels in bulk to try and cleanse the app of inappropriate content.When reached for comment, a YouTube spokesperson sent a statement in response. “We are committed to supporting and amplifying Black creators on YouTube Kids and have launched programming initiatives designed to highlight equality, racial justice, and activism for kids of different ages, but we recognize there’s more to be done,” it read. YouTube, part of Alphabet Inc.’s Google, pitches itself as an equalizer in the media world, allowing anyone to upload videos and amass an audience. But some of YouTube’s video producers say the company hasn’t done enough to support diversity. In June, four Black YouTube creators sued the company for racial discrimination, arguing that the service automatically removed their videos. YouTube has said it doesn’t discriminate and that the suit is without merit. On June 11, YouTube announced a new $100 million fund for Black creators. The opacity surrounding YouTube’s recommendations, rules and content-moderation process is a frequent source of frustration among its users. YouTube staff members don’t select the videos or the content creators that get promoted, instead letting its software surface programming based on viewing habits. The Zontays were never notified directly that their programming had been removed from the Kids app. Instead, they learned about it when a fan reached out and asked why their videos were missing. While they waited for an answer from YouTube, the Zontays saw a post on Facebook from a YouTube creator with the inverse problem: Their video was inadvertently appearing on the Kids app even though they had uploaded footage not intended for minors. “It makes no sense,” said Symphony Zontay. Melanie, the owner of CrayCrayFamilyTV, a Black family-friendly vlogging channel, said she has experienced similarly puzzling problems. (She asked that Bloomberg News not use her last name for privacy reasons.) Videos of her two daughters, Naiah and Eli, have been removed from YouTube Kids without explanation while the family’s clips of doll videos have remained on the app. She suspects YouTube’s algorithm may be at work, surfacing similar videos from families with a different racial profile. “It’s more digestible to see very lily-white families doing things,” she said. “It’s just unfortunate.” A company spokeswoman told Bloomberg News that some channels have been removed because a number of their videos—showing the binge consumption of junk food or “pranks where kids were in distress”—were “not enriching or appropriate” for children. The company said that many of those channels have since “adjusted” their content and, as a result, would be reinstated on the Kids app. YouTube didn’t specify which channels had run afoul of the rules.Zerius Zontay said his family has not produced any inappropriate videos and pointed to several examples of clips currently available on the Kids app that feature pranks and skits involving junk food. “We do not have this type of content, but others do and they are on the app!” he wrote in an email. YouTube Kids draws a fraction of YouTube’s main audience, but the app is where parents, educators and YouTube steer children. Last fall, after settling with U.S. regulators for violating children’s-privacy laws, YouTube began promoting the app with videos that creators or the company deemed “Made for Kids.” For millions of children, YouTube has replaced television as the central medium for passing the time and learning how the world works. There are Black creators on YouTube Kids, and the site’s top-earning channel, Ryan’s World, features an Asian-American family.Even after being kicked off of the Kids app, the Zontay family’s programming continued to thrive on YouTube’s main site. Their primary channels, ZZ Kids TV and Goo Goo Colors, have more than 6.5 million subscribers—just shy of Nickelodeon’s numbers on YouTube. In 2019, the two channels brought in over 97 million views on the Kids app before being removed, according to Zerius Zontay.“In parts of the country where they aren’t seeing Black faces, how else are they going to learn about diversity if not through YouTube?” said Melissa Hunter, head of Family Video Network, a multichannel network that represents the Zontays.On June 28, the Zontays posted a 52-minute video about the issue. In it, Zerius, Symphony and their three sons are wearing shirts that read, “Black Entertainment Matters.” A few days later, they found that their channels had been reinstated on YouTube Kids with no explanation. For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Google’s campus security system subjected Black and Latinx workers to bias and prompted complaints to management, according to people familiar with the situation, leading the company to scrap a key part of the approach.The internet giant encouraged employees to check colleagues’ ID badges on campus, and asked security staff to do the same. This went beyond the typical corporate office system where workers swipe badges to enter. The policy was designed to prevent unauthorized visitors and keep Google’s open work areas safe.But some staffers told management that Black and Latinx workers had their badges checked more often than other employees, according to the people, who experienced this themselves or saw friends and colleagues go through it.As a result, these employees felt policed on campus in a similar way that they are under suspicion elsewhere in life, said the people, who weren’t authorized to speak publicly about the issue. It’s an example of the unconscious, or overlooked, biases that make working in Silicon Valley harder for minorities, the people added.Some workers complained about the security system to Chief Executive Officer Sundar Pichai, and, in the midst of recent nationwide protests against racism and police brutality, he committed to change. In a June 17 blog post, the CEO pledged donations and more diverse leadership, and said the practice of asking Googlers to check each other’s ID badges would end. The change seems small, but it illuminates how Black and brown employees struggle to fit in at Google, and elsewhere in Silicon Valley. A Google spokeswoman declined to comment.Read more: For Black CEOs in Tech, Humiliation Is a Part of Doing Business“We’re working to create a stronger sense of inclusion and belonging for Googlers in general and our Black+ community in particular,” Pichai wrote in the blog, which was also sent as a memo to staff. “We have realized this process is susceptible to bias.”Alphabet Inc.’s Google has tried to increase the diversity of its workforce. The company was among the first to release an annual diversity report, and it has pledged to hire more minorities, women and LGBTQ employees for years. However, progress has been slow, especially when it comes to hiring and retaining Black people. Just 3.7% of Google’s U.S. workforce is Black and 5.9% is Latinx, according to its most recent diversity report. Other tech giants have also struggled with this.Read more: Facebook, Google Diversity Pledges Follow Scant Progress on Race The recent wave of anti-racism protests and a broader embrace of the Black Lives Matter movement spurred underrepresented workers at Google to push for more and faster change. A Black Leadership Advisory Group met multiple times with Pichai after the police killing of George Floyd. The badge-checking system was one of the top issues highlighted by the group. So the CEO’s decision to scrap the policy was a big deal for Black and Latinx workers, according to the people familiar with the situation.Pichai said Google had been researching changes to its campus security policy over the past year, but the protests likely prompted faster action. The company had been increasing workplace security since April 2018, when three employees were shot at the Silicon Valley headquarters of its YouTube video unit.The insistence on checking employee IDs was meant to discourage “tailgaters” -- people who followed others into Google buildings without swiping badges to enter. But in practice, Black and Latinx employees were stopped and told “Let me see your badge,” even after they proved they had the right to enter the office by swiping in, one of the people said.The resulting impression Black employees got is that they don’t belong, that their education, credentials and gainful employment aren’t enough to avoid suspicion based on the color of their skin, the people said. One staffer described the policy as death by a thousand cuts, which may have contributed to some Black and Latinx employees leaving the company. Retaining diverse workers is a challenge other companies face, too.Another Google worker noted that Google’s previous policy empowered employees outside of security staff to weigh in on who belonged on campus and who didn’t. Pichai conceded in his memo that the policy may have added to a loss of “psychological safety” among Black workers and other underrepresented employees.Even with the CEO’s recent changes, some Black employees don’t expect the company to become a haven for Black advancement any time soon. One worker pointed out that the company has committed to hiring and promoting “underrepresented” executives, not specifically Black people.Another Black employee said they were heartened to see that Pichai’s pledge included a specific target this time -- increase leadership from underrepresented groups by 30% by 2025. There are some big open roles at Google right now, so workers will be watching to see if real change happens, this person said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) owned Google will not be offering its new cloud service termed "Isolated Region" in China and other sensitive markets.What Happened Isolated Region was an initiative that aimed at helping countries keep control of data within their borders and was thought to be a "massive strategy shift," according to Bloomberg's sources.Under the initiative, Google could have set up cloud computing services controlled by a third party -- for example -- a government agency or a local company. This would have allowed the search engine giant to separate the set-up from its existing data centers and computer networks.Bloomberg's sources revealed that the search engine giant ended the Isolated Region initiative in May due to mounting geopolitical concerns and COVID-19.Google's plan was to sell cloud services in what it terms as "sovereignty sensitive markets," such as China and the European Union.A Google spokesperson denied that Isolated Region was shuttered due to geopolitical tensions or the pandemic and instead attributed the closure of the project to "other approaches" the company was pursuing that "offered better outcomes."The spokesperson said that Google does not offer and "has not offered cloud platform services inside China." Why It Matters The project was initiated in 2018 and was thought to be aimed at China, where rules require that Western firms join hands with a local Chinese partner company in order to provide data or networking services, according to Bloomberg. Rivals Amazon Inc (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) sell their cloud services in China, but Google does not. Efforts were made by Google to sell these services nearly three years ago, but these were brought to an end by Thomas Kurian after he took over as Google Cloud's CEO.Google cloud generated $8.9 billion in revenue in 2019, a rise of 53% compared with the preceding year. Price Action Alphabet class A shares traded 0.16% higher at $1,506 on Wednesday in the after-hours session. The shares had closed the regular session 0.92% higher at $1,503.60.The company's Class C shares traded 0.33% higher at $1,501 in the after-hours and closed the regular session 0.73% higher at $1,496.See more from Benzinga * Verizon's Decision To Halt Facebook Advertising Was Not Political, Says CEO * Hong Kong National Security Law Fallout: US Tech Companies To Decline Law Enforcement Requests * Google Puts Off Reopening Offices As Coronavirus Infections Escalate(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Alphabet Inc’s Google (GOOGL) has stopped plans to develop its cloud computing project in China and other sensitive countries partly due to geopolitical tensions and the coronavirus pandemic.According to the decision, which was first reported by Bloomberg, the search giant in May discontinued the cloud project known as “Isolated Region”, which sought to meet nations' need to control data within their borders. The project was considered a "massive strategy shift," which had involved hundreds of workers around the globe.Google's decision was made partly because of global political divisions, which were exacerbated by the Covid-19 pandemic, according to the Bloomberg report. The geopolitical issues put demands on Isolated Region that it couldn't deliver.The project would have allowed Google to set up cloud services controlled by a third party, such as a locally owned company or a government agency. The result would be a business isolated from Google's existing cloud computing services, which include data centers and computer networks."What we learned from customer conversations and input from government stakeholders in Europe and elsewhere is that other approaches we were actively pursuing offered better outcomes," a Google spokeswoman said following the report. "Google does not offer and has not offered cloud platform services inside China."Google as well as other major tech companies such as Microsoft (MSFT) and Amazon.com (AMZN), have been investing into expanding their cloud computing capabilities and offerings to add another revenue growth channel beyond search advertising. While Amazon and Microsoft sell their cloud services in mainland China, Google hasn't. Last year Google Cloud’s revenues increased 53% to $8.9 billion year-on-year as the search giant targeted finance and government sectors which are increasingly in need of security shields and features to protect confidential data.Needham analyst Laura Martin earlier this week lowered Google’s 2Q20 revenue estimate to down 7% year-on-year because of expectations of declining US search revenue. Martin noted that eMarketer projects that Google-search revenue will decline in 2Q and 2020, for the first time in history, adding that she expects international ad revenue to be down more than in the U.S.“We are more optimistic than eMarketer for 2H20, so our GOOGL revenue estimate for FY20 is for flat revenue vs eMarketer's 3.3% decline, including a 7.2% y/y search decline," Martin wrote in a note to investors maintaining a Buy rating on the stock with a $1,800 price target.Shares in Google have fully recovered since dropping to a low in March and are now trading more than 12% higher than at the start of the year. The stock advanced less than 1% to $1,502.79 at the close of trading on Wednesday.Indeed, the stock’s upside potential now looks more limited. The average analyst price target of $1,531.50 indicates shares are almost fully priced and have room to advance a mere 1.9% in the coming 12 months. (See Alphabet’s stock analysis on TipRanks)Overall, the Wall Street rating outlook for Google remains bullish. The Strong Buy analyst consensus boasts 28 Buys versus 2 Holds.Related News: Google Snaps Up Canadian Smart Glasses Startup North Google Vulnerable to Reduced Ad Spend, Says 5-Star Analyst Google, Temasek Are Said To Be In Talks To Invest Up To $1B In Tokopedia More recent articles from Smarter Analyst: * Square (SQ): One Analyst Finally Got off the Fence -- but for What? * Google Vulnerable to Reduced Ad Spend, Says 5-Star Analyst * Altra Industrial Motion's (AIMC) Valuation Is Appealing, Says Analyst * Upwork’s Potential Is Underappreciated, Says Analyst
Google (GOOGL) takes the last letter among FAANG stocks and indeed in 2020 it is currently in last place among its peers where market performance is concerned. While some tech giants have been notching all-time highs almost every other day recently, Google has relatively underperformed. That said, the internet giant is only a touch away from its all time highs of $1,530 per share, and with a 12% gain year-to-date, it is way too early to call in the search engine doctor.However, Brian White, analyst at investment firm Monness, notes other areas Google needs to keep a close eye on.“For the foreseeable future,” said the 5-star analyst, “We anticipate Alphabet will struggle with weak digital ad spending trends and other headwinds.”The recent ad boycott on Facebook, while yet to impact Google, does leave other platforms vulnerable to further boycott action, with YouTube, according to White, the most at risk from a wider ban. On the flip side, with ad spend on Facebook reduced, companies’ ad budgets could be siphoned off in other directions, which could be beneficial to Google.Still, with COVID-19 showing no signs of retreating just yet, slashed ad budgets could be a theme for the foreseeable future. A post-COVID world could usher in changes that might not have been considered in the pre-pandemic climate.“Given the weak economic environment and the expansion of this COVID-19 crisis across more parts of the country, a pause in spending could turn into something that lasts longer than expected given a lack of urgency to return to previous spending levels. Moreover, there is a risk that some companies spending less on advertising, notice little impact on revenue from their cutbacks, resulting in less ambitious ad spending budgets in the future,” White summarizedAll in all, White maintains a Buy rating along with a $1,420 price target. Therefore, the analyst anticipates shares declining by 5.5% over the coming months. (To watch White’s track record, click here)Most on the Street keep a Buy rating, too – in fact, 29 out of the 31 analysts to post a Google review over the last 3 months suggest just that – with the remaining 2 recommending a Hold. GOOGL's strong Buy consensus rating is backed by a $1,527.66 price target – suggesting an all-time high is possible, although the figures implies a modest upside of 2% from current levels. (See GOOGL stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. More recent articles from Smarter Analyst: * Altra Industrial Motion's (AIMC) Valuation Is Appealing, Says Analyst * Upwork’s Potential Is Underappreciated, Says Analyst * Tesla China Sales Of Model 3 Vehicles Up 35% In June * Walgreens Plans To Expand 700 Stores Into Primary Care Clinics
(Bloomberg Opinion) -- Time will be the next frontier in India’s digital battlefield; dollars will follow the hours consumers spend online.India has left a void in their day by banning 59 Chinese apps after a border dispute with its northern neighbor led to violent clashes. The video-sharing platform TikTok, which became a craze in towns and villages as a medium of expression, is gone. So are its smaller cousins, like Bigo Live and Likee.What can fill the gap? Thanks to the world’s cheapest data charges of 9 cents per gigabyte, Indian smartphone users are guzzling content for six hours plus. For local startups like Glance, which offers games, news and video on the mobile lock-screen, the ban on Chinese competition is a chance to add to its tally of 100 million daily active users. The country’s youth bulge also makes it a perfect occasion for homegrown education technology unicorns like Byju to scale up.But the ultimate prize may go to super-apps that meld content and commerce in the 16 Indian languages besides English that boast anywhere between 5 million to half a billion speakers. To not have to download multiple apps to do different things will save phone memory, an important consideration for those who access the internet on low-end devices. Tencent Holdings Ltd.’s WeChat, which offers everything from messaging to gaming and financial services, provides a successful template. Chinese users are also online for six hours a day, mostly to browse content, particularly social media. Although only 4% of their time is spent on e-commerce, it’s enough to drive $1.5 trillion in annual online sales. The smaller Indian market, with online sales of $40 billion, will want to copy the playbook. The most obvious super-app candidate is billionaire Mukesh Ambani’s Jio Platforms Ltd., a four-year-old startup with an equity value of $65 billion, including more than $15 billion recently raised from investors including Facebook Inc., KKR & Co. and Silver Lake Partners. Before Jio eventually seeks a listing on Nasdaq or the New York Stock Exchange, Ambani would probably want it ready as a carriage-content-and-commerce powerhouse for half-a-billion people.Jio’s 4G telecom service already has roughly 400 million subscribers, though they currently don’t even pay $2 a month. The trick to a $100 billion-plus initial public offering would lie in using the partnership with Facebook to introduce features such as the WeChat mini-program via the popular WhatsApp messaging service. It lets users book hotels, order taxis, explore augmented reality to try on a new L’Oreal beauty product, or test-drive a Tesla — without leaving WeChat. When it comes to building product awareness and interest, these embedded mini-apps in China are now a fourth as effective as regular online stores run by JD.com Inc. and Alibaba Group Holding Ltd., according to McKinsey & Co. They will offer brands in India a chance to sell more — and more profitably — even in remote towns. The consulting firm found that younger consumers in smaller Chinese cities give more weight to advice from social-media influencers and referrals by friends than their counterparts in larger metropolitan areas. This will probably hold true for India as well. As for the actual commerce, JioMart, Ambani’s new e-commerce platform, would take orders and — if the regulator permits it — accept payments via WhatsApp. Staples could be delivered by traditional neighborhood stores, with Jio helping connect them to buyers. For discretionary products, Ambani may use his Reliance Retail Ltd., already the country’s largest bricks-and-mortar retailer. It won’t be too hard to grease the wheels of super-app commerce with credit. Local lenders will be desperate for a new source of balance-sheet expansion after absorbing inevitable losses from the pandemic and lockdown. Still, the road to satisfied digital customers will be long and bumpy because of India’s creaky infrastructure. Keeping users hooked with novel content will therefore be crucial. Facebook is building a new version of Quest virtual reality headsets; the Silicon Valley firm is also acquiring studios that make VR games. Jio, which wants its set-top box to support online gaming, could find opportunities for collaboration.However, the main entertainment fare will still be cricket and Bollywood. Last year, Ambani promised Jio First Day First Show — movies streamed to broadband customers on the day of their theater release. With Covid-19 shutting down cinemas, producers in India need digital alternatives; audiences need their fix. Although Ambani appears to be ahead, his won’t be India’s only super-app. Amazon.com Inc. has pledged to invest $5.5 billion in the country, while Walmart Inc. has plowed in $16 billion to acquire local e-commerce leader Flipkart Online Services Pvt. Potentially, they — or Alphabet Inc.’s Google — could seek telecom and digital media partners.Western tech firms were broadly shut out of China’s digital revolution. In India, they’ll join the fray, hoping for insights that will come in handy in other emerging markets. But India will still prefer local control over the super-apps. Six hours a day of 1.3 billion people — and all the data that flows from it — is a coveted resource, something politicians won’t want slipping out of their sphere of influence. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alphabet (GOOGL) closed at $1,503.60 in the latest trading session, marking a +0.92% move from the prior day.
(Bloomberg) -- Google abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the pandemic, according to two employees familiar with the matter, revealing the challenges for U.S. tech giants to secure business in those markets.In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” according to one of the employees, who said Isolated Region had involved hundreds of workers scattered around the world.Alphabet Inc.’s Google is pouring money into cloud computing, part of a broader effort to find new sources of growth beyond search advertising. Google Cloud generated $8.9 billion in revenue in 2019 -- a 53% increase over the previous year -- as it has pushed into sectors such as finance and government that require special security clearance and features that shield confidential data. Rivals Microsoft Corp. and Amazon.com Inc. already offer these capabilities via their cloud units.Google’s recent decision to nix the Isolated Region project was made partly because of global political divisions, which were exacerbated by the Covid-19 pandemic, according to the two employees, who requested anonymity because the project hasn’t previously been made public. The geopolitical issues placed demands on Isolated Region that it couldn’t deliver, according to one of the employees. Documents provided to workers also detailed global tensions and their influence on Isolated Region’s closure, the employee said.The initiative would have allowed Google to set up cloud services controlled by a third party, such as a locally owned company or a government agency. The result would be a business sequestered from Google’s existing cloud computing services, which include data centers and computer networks.In January 2019, amid growing tensions between the U.S. and China, Google decided to pause its plans for Isolated Region in China and instead began to prioritize potential customers in Europe, the Middle East and Africa, according to the two employees. But the project was scrapped entirely this May, the two employees said. Google has since weighed a pared back cloud offering to enter China, according to the two employees.‘Other Approaches’A Google spokeswoman, speaking after the story was published, said Isolated Region wasn’t shut down over geopolitical concerns or the pandemic. She also said the company isn’t weighing options to offer the Google Cloud Platform in China.Isolated Region was shelved because “other approaches we were actively pursuing offered better outcomes,” she said, declining to detail those approaches. “We have a comprehensive approach to addressing these requirements that covers the governance of data, operational practices and survivability of software,” the spokeswoman said. “Isolated Region was just one of the paths we explored to address these requirements.”“What we learned from customer conversations and input from government stakeholders in Europe and elsewhere is that other approaches we were actively pursuing offered better outcomes,” the spokeswoman said. “Google does not offer and has not offered cloud platform services inside China.”According to one of the employees, the plan involved selling cloud services in what Google calls “sovereignty sensitive markets,” such as China and the E.U., where there are strict laws for companies offering services that involve the collection or processing of people’s data.The project, which began in early 2018, sought to address rules in China that require Western companies to form a joint venture with a Chinese partner company when they provide data or networking services, one of the employees said. In such a relationship, the partner company would have retained both physical and administrative control over user data. The arrangement was intended to satisfy Chinese authorities while also providing a barrier between Google’s Isolated Region cloud services and the rest of its data center network, which stores and processes emails, documents, photographs and other data from its users, the employee said.By handing over control of user data to third party companies in foreign countries, Isolated Region also aimed to appease privacy concerns about the U.S. government’s potential ability to carry out covert surveillance of Google’s Cloud services, the employee said. Those concerns increased in March 2018, following the passing of the Clarifying Lawful Overseas Use of Data Act, better known as the CLOUD Act, a federal law that granted U.S. law enforcement agencies more power to request personal data stored by American technology companies even if the data is stored on servers located outside of the U.S., the employee said.Data SovereigntySome employees expressed concern about the Cloud project in China and questioned their superiors about it, according to one of the employees. But it’s not known if employee opposition was a factor in Google’s decision to stop the initiative in China or elsewhere.Isolated Region was part of a larger Google project known as “Sharded Google,” which has sought to develop new data storage and processing facilities, known as “shards,” that are walled off from the rest of the company’s systems, according to the employees.Major cloud providers are all racing to develop data centers that are either physically separated or rely on complex software to keep information flows apart.It’s a costly process, driven by rising demand on two fronts. One is from firms in specific industries, such as finance, that want isolated machinery for security reasons. Another comes from laws that require data reaped inside the country to stay there, with China being perhaps the most stringent example.Both trends are accelerating. More than 100 countries have some sort of data sovereignty laws in place, according to David Gilmore, chief executive officer of DataFleets Ltd., an enterprise software firm. In the U.S., state policies, such as California’s new consumer privacy law, provide further restrictions on how cloud companies handle data. “It’s just the tip of the iceberg,” he said.France and Germany recently started Gaia-X, an effort to build the continent’s own data storage systems over the internet without relying on U.S. technology giants.Cloud RegionsProtectionism is a major force in these calls for data localization, said Trey Herr, director for the cyber statecraft initiative at the Atlantic Council. “Part of it is security,” he said. “A lot of it is economic.”Google’s competitors in this space, such as Amazon Web Services and Microsoft Azure, have dominated the market in recent years. Cloud regions let companies offer the horsepower and security of multiple data centers. Microsoft has more than 60 cloud regions globally, more than double AWS and Google. The Google spokeswoman said the company defines regions differently.In 2018, Google considered building an isolated version of its systems to support a classified U.S. government computer network. The system, known as “air gap,” would have been disconnected from the internet and from Google’s existing servers, and was designed to be used only on high-security government networks that store secret information.But the air gap project was shelved after internal opposition. Some employees said they feared the system would lead to work with the U.S. military, which they opposed for ethical reasons. Other employees opposed it on technical grounds and thought it would be too hard to deliver.In China, Google has long been eyeing ways to access the country’s lucrative marketplace, where there are approximately 900 million internet users. While Amazon and Microsoft sell their cloud services in mainland China, Google hasn’t. But about three years ago, the company began talks with Chinese firms about providing its main data storage service in the nation through a joint venture, as Amazon and Microsoft do. Google also provided some of its free machine learning tools in China, and the company started working on projects to provide more software tools to developers there.Most of those efforts, however, were shut down by Google Cloud Chief Executive Officer Thomas Kurian, shortly after he took over the division in January 2019, according to one person involved in the plans. At that time, political and economic tensions between the U.S. and China were rising. In addition, Google’s actions in the country had come under increased scrutiny, following leaks about a plan for a censored Chinese version of its search engine.Isolation Region was conceived as another potential product for Google to offer in China, according to one of the Google employees. But key political impediments contributed to the decline of the project in China and elsewhere, including the U.S. national security orders against China telecommunications giant Huawei Technologies Co. and the fallout from the pandemic, according to the employee; Google disputes that the pandemic or geopolitical issues were factors.Kurian didn’t scrap all of Google Cloud’s China-related work. According to one of the Google employees, and another person familiar with Google’s cloud operations, the company has continued to explore the possibility of rolling out a service called Anthos in the country. Launched in 2019, Anthos lets companies using one cloud provider easily add on another. Businesses across the globe have adapted this strategy as a way to hedge financial and infrastructure risk. The Google spokeswoman said the company has no plans to provide Anthos in China.In a September 2019 interview with CNBC, Kurian said that Google’s cloud business was seeing “enormous growth” and hadn’t been affected by the U.S. trade war with China. He pointed to the company’s large presence in Hong Kong and Taiwan and didn’t rule out expanding into China’s cloud market. “We continue to monitor the demand for our technology from Chinese customers,” he said.(Updates with additional comments from Google starting in the sixth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Earlier in the day, Bloomberg News reported, citing two employees, that Google had shelved the project in China and other politically sensitive countries in May, partly due to rising geopolitical tensions and the pandemic. The search engine giant, however, said that the project's shutdown was not due to either of those two reasons and that it has not offered cloud platform services in China.
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