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Alphabet: The Need For Less Opacity


Alphabet reported impressive y/y gains in revenue and earnings for 2016 Q1.

Yet this was considered a "miss."

Here, Alphabet is the victim of its own lack of transparency.

For its Q1 earnings, Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) posted impressive revenue and earnings growth, yet the report was considered a "disappointing miss" and the stock lost about 5%. Normally I don't care about such "misses," considering the fault to lie with the analysts rather than the company involved. But Alphabet has become so opaque, I'm surprised analysts got as close as they did. Alphabet's management has become so insular, that it's difficult for investors to know what they're investing is.

Source: Gravitatenow

Gag Order

Investors who listened to the conference call last Thursday were treated to the spectacle of Alphabet CFO Ruth Porat continually intercepting questions specifically directed at Google CEO Sundar Pichai. Here's an example. Anthony DiClemente, analyst with Nomura asked,

First, for Sundar on Google Fiber, just at a higher level, would you please broadly update us on your learnings from Google Fiber up until this point?

As she had done so often throughout the conference call, Ruth swooped in:

So let me go ahead and start on the Fiber question. Fiber is one of the businesses that is in Other Bets. And like all of our access efforts, we're really focused. And our vision here is to create abundant and ubiquitous networks. We think there's a lot of opportunity to improve the experience that users have, and that's where the Fiber team is focused. And we have some other efforts within Other Bets that are really exciting as well that address access. Loon within our X business is targeting the 4 billion people still offline. And we view that similarly as a big opportunity and an important problem to address.

And in terms of the early learnings, there have been a lot. As I talked about on the last quarter call, we've really continued to refine and enhance our go-to-market strategy, the way we're working with cities, the way we're building out those cities and really the...