Like its prominent peers, Alphabet’s (GOOGL) subsidiary Google had a somewhat eventful year. Let’s take a look at how 2018 unfolded for the search giant. While not much happened in the first two months of the year, in March, the company decided to sell its restaurant review app Zagat to a start-up called The Infatuation.
Google had acquired Zagat for $151 million but it did not provide the expected returns so the company decided to offload it. The same month, Google said it is developing a service called Google News Initiative to tackle fake news and revealed its plan to spend around $300 million over the next three years to ensure ethical news reporting.
In April, Google revamped Gmail with a host of new features in an effort to gain a competitive edge against Microsoft’s (MSFT) Outlook. In May, it was reported that Google was collaborating with the Department of Defense for a project involving the use of machine-learning tools to assess military drone footage.
The project, codenamed Project Maven, faced stiff opposition from Google employees and external groups and the company finally decided not to renew its contract once the existing obligations were completed.
In June, Google decided to rebrand its marketing and advertisement services and as part of these efforts, the company said it would retire its AdWords and DoubleClick brands and merge the services with its other marketing divisions. During the month, the company also made a $550 million investment in Chinese firm JD.com.
In July, European Union regulators imposed a fine of $5 billion on Google for allegedly abusing the dominant position of its Android operating system to give more visibility to certain apps and services on its search engine. The news hurt its stock slightly at the time.
In August, Google revealed plans to develop a search engine for China in accordance with the country’s strict censorship laws. The news did not go down well with Googlers, outside parties and even lawmakers who opposed the project on ethical grounds.
The same month, the company faced allegations that it had partnered with Mastercard (MA) to assess the purchasing patterns of cardholders, although these claims were not confirmed. It was also reported that Google tracked the location history of users for its Maps and Search services, even when the GPS was off.
Google also faced flak from President Trump who claimed the search giant was suppressing conservative voices in its Search results. The company denied these allegations and there is no proof that its search results were tampered with.
In September, Google said it would shut down the Inbox email app by March 31, 2019, and that all of Inbox’s features were being integrated into the Gmail app. October was an eventful month for the search giant. The company unveiled the Pixel 3, Pixel 3 XL, Chromebook Tablet and Google Home Hub at its #MadeByGoogle event.
During the month, the company suffered a data breach in which the personal information of around 500,000 Google+ users were reportedly compromised due to a software bug, leading Google to shut down Google+ for consumers.
In October, Google also chose not to compete for the $10 billion cloud-computing contract of the Pentagon citing that it might clash with its corporate values. With regards to its Chinese search engine, after claiming that it was merely exploring options in China, the company confirmed that the project was in the early stages of development.
In November, consumer advocacy groups in seven countries threatened to file lawsuits against Google with their respective regulators for GDPR violations over its location-tracking methods. The company is likely to face hefty fines in this regard.
In December, Google’s CEO Sundar Pichai appeared before the Congress where he faced several questions on political bias, data security and the Chinese search engine project. The Google chief said the content on the company’s websites was not biased in any way and also that the firm was doing its best to make data management easy for users.
At the hearing, Pichai said Google had no current plans to roll out a censored Chinese search engine. Earlier this week, it was reported that Google has dropped plans for the China search engine at least for the short term.
Looking forward, in 2019, Google can be expected to face the aftermath of the issues it faced in 2018 and the company might end up with some fines related to GDPR violations and other lawsuits, which could impact its quarterly results. However, it is likely that the company will retain its leadership position in areas like digital advertising. All in all, we can expect Google to prevail.
Alphabet’s stock has dropped 3% so far this year. Looking at the past three months, the stock has dropped 14%.
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