Author: David Bloom / Source: Forbes
Not many companies can absorb a $5 billion fine and report a huge and highly profitable quarter a week later. One of those very few companies is Alphabet, the parent of Google and YouTube.
In announcing its quarterly earnings today, where revenue jumped 27 percent to $32.
7 billion and profits hit $3.2 billion, Alphabet also showed why it’s so difficult for regulators to rein in the digital giant. It may be time to consider other approaches to manage digital powers such as Google. Too big to fail has become too big to control.Yes, those quarterly profits were down about 10 percent because of the fine, but as the company disclosed, without the fine, it would have generated almost $7.9 billion in profits, up 17 percent from last year’s $6.9 billion, and up 61 percent from two years ago. No one’s worrying about Sergey and Larry’s next meal.
And no one’s worrying about the stock either. Alphabet shares were up more than $13 per share, or 1.1 percent, to $1,211 by the close of trading. After hours, it traded even higher.
That’s a statement on shareholder equanimity in the face of regulatory hostility. Investors’ faith in Google’s prospects also shows how little they believe further fines might dent the Google money machine or change behaviors that have helped cement its market power in many sectors.
So what’s left for regulators when a company is so big that it mostly shrugs (and appeals) when hit with a…
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