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Alphabet CEO and the data elephant in the room

Stuart Lauchlan Profile picture for user slauchlan April 23, 2018
Data privacy concerns are among the hottest topics in tech after the Facebook scandal. Not that you'd know it at Alphabet...

elephant in room
It takes something in the current febrile climate around data privacy for the CEO of Google parent Alphabet to get on an analyst conference call and get away with not talking about a topic that’s dominated the 2018 tech agenda.

That something, it can can argued, is poor questioning from the assembled analyst high brains on the call. Certainly Sundar Pichai wasn’t likely to jump voluntarily into that bear pit, but no-one seemed willing to give him a helpful shove either, despite regulators around the globe being all too ready to bundle Google up with Facebook and others when it comes to criticising data privacy policies.

The closest Pichai came was when he was asked about next month’s arrival of GDPR (General Data Protection Regulation), at which point he voiced some pretty anodyne holding statements:

For us, it's not new. We started working on GDPR compliance over 18 months ago and have been very, very engaged on it. It's really important, and we care about getting it right. And overall, we have long had a very robust and strong privacy program at Google, too. So we are committed to meeting requirements on May 25 and also long term. We are working very closely with advertisers, publishers and our partners. And we will also update all the privacy policies and controls we provide to users worldwide. So it's a big effort. We are very committed to it. We are very focused on getting it right by our users and partners, and that's where our focus is now.

That doesn’t address the potential impact that GDPR is likely to have on Google’s ability to deliver targeted advertising on behalf of clients, something that clearly has bottom line implications for the firm. Pressed on this, Pichai produced this answer/non-answer:

It's important to understand that most of our ad business is Search, where we rely on very limited information, essentially what is in the keywords to show a relevant ad or product. And so we've been preparing this for 18 months, and I think we are focused on getting the compliance right. It'll be a year's long effort, and we are helping not just us but our publishers and partners. But overall, we think we'll be able to do all that with the positive impact for users and publishers and the advertisers and so our business.


Discussion of search was a useful bridging subject to get Pichai onto a chosen safe topic - AI and machine learning:

Search has been leading the company in terms of how they have been adopting machine learning and AI, and it's really working well through Search and Assistant. We sense that, obviously, as an AI-first company, AI cuts across everything we do in Google.

The AI-first meme was one that the Alphabet CEO had come prepared to talk about:

First, machine learning and making information accessible to everyone. Our own ML-powered products like Google Photos and Google Lens gets better every day. The Google Assistant is a great example of this. In the home, we have added over 200 new device partners that work with Assistant just on the last 4 months alone. We now partner with all major manufacturers of connected devices for the home in the U.S.

All told, the Google Assistant can now help you with over 1 million actions, including new things like reminding you to buy bread when you get to the store or sending money to friends or if you want to get a ride share home. For a concept we unveiled at I/O less than 2 years ago, this is great progress.

AI is also unlocking new opportunities for everyone. Just in the last few months, we have seen some amazing applications from dairy farmers in Georgia using TensorFlow to improve the health their herds to our own Google researchers who figured out how to use ML techniques to assess a person's risk of a heart attack. The possibilities of AI in health care are truly exciting.

At our recent TensorFlow summit, we introduced TensorFlow hub, making it easier for developers to share and reuse models so that we can work together to tackle even more problems and get to better ideas faster. Our investments in this area are helped because of our specialized Tensor Processing Units, which are specifically designed to be highly efficient for machine learning applications.


My take

An easy ride for Pichai from Wall Street’s finest, but when the firm turns in a 73% boom in profits based on advertising, maybe there are some topics that we just don’t want to talk about…yet. Let’s see if that’s a line that can be held in future quarters. Data privacy concerns and new regulation will have an impact on ad revenues. The only question is how big that impact will be. (And I can't see Facebook's Zuckerberg and Sandberg getting off as lightly tomorrow when its their turn to report in to Wall Street!)

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