Google's interest positive but may not help solve Voda Idea's debt woes

Acquisition of a controlling stake by an outsider or a sizable equity infusion by current promoters remains the need of the hour, Credit Suisse said in its latest note.

A potential investment by Google into cash-strapped Vodafone Idea (VIL), if materialises, will be a strategic positive for the Indian telecom operator, but a five per cent stake would still be inadequate to solve the telcos' debt problems, analysts said on Friday.

Acquisition of a controlling stake by an outsider or a sizable equity infusion by current promoters remains the need of the hour, Credit Suisse said in its latest note.

Alphabet Inc's Google is said to be eyeing about 5 per cent stake in VIL, the Financial Times had reported on Thursday. Such an investment in VIL will pit the search giant against Facebook which has picked up a stake in Jio Platforms, the firm that houses India's youngest but biggest telecom company - Reliance Jio.

Google investment into VIL can be incrementally positive, but a 5 per cent stake is unlikely to move the needle or provide any meaningful relief to VIL's debt problems, said Credit Suisse.

"We think unless Google (or any other external investor) looks at acquiring a controlling stake in VIL, the chances of company's long term survival beyond FY23 (when the moratorium on deferred spectrum debt ends) appears to be low," it said.

Goldman Sachs said that at Vodafone Idea's current market cap, a 5 per cent stake would be valued at USD 100 million or less than one per cent of the company's USD 14 billion-outstanding net debt as of December 2019.

Google ordered to pay for news taken from publishers in France

The French antitrust agency gave the Alphabet unit three months to thrash out deals with press publishers and agencies demanding talks on how to remunerate them for displaying their content.

Google was ordered by French antitrust regulators to pay publishers to display snippets of their articles after years of helping itself to excerpts for its own news service.
The French antitrust agency gave the Alphabet unit three months to thrash out deals with press publishers and agencies demanding talks on how to remunerate them for displaying their content.

The search engine giant may have abused its dominant market power, causing “serious and immediate harm” to the media, the Autorite de la concurrence warned in its statement on Thursday.

European publishers have been pushing regulators for over a decade to tackle the power of Google, which has lured away billions of euros in advertising revenue. This is the first time they have landed a punch. The EU has failed to act on complaints that Google unfairly displays publishers’ content.

“What’s clearly out of the question now is that the talks end with the same result as before: zero,” said Adrien Giraud, a lawyer who represents a grouping of newspapers, including Le Figaro, Les Echos and Le Monde. He says Google can expect publishers to reach out “as soon as this afternoon”.

The move is the latest crackdown on Silicon Valley by the French watchdog. Last month, Apple was fined a record ^1.1 billion ($1.2 billion) after the US tech giant was criticised for anti-competitive agreements with two distributors over the sale of non-iPhone products such as Apple Mac computers.

Google said it would comply with the French competition authority’s order, known as interim measures, and pointed out that it had already begun talks with publishing groups.

As Sundar Pichai becomes Alphabet chief, founders get $2-bn retirement gift

The Google co-founders added more than $1 billion each to their net worth as the firm's shares rose 1.9 per cent in New York.

Larry Page and Sergey Brin just got a $2.3 billion retirement gift from investors.
The Google co-founders, who announced Tuesday they were stepping down from day-to-day management of parent Alphabet Inc, added more than $1 billion each to their net worth as the firm’s shares rose 1.9 per cent in New York.

They each own about 6 per cent of the internet giant and still control Alphabet through special voting shares.

The gains come as investors welcome Sundar Pichai’s elevation to chief executive officer of Alphabet, replacing Page in the role. It means the three most valuable US tech firms no longer have a founder at the helm.

Like Apple Inc’s Tim Cook and Microsoft Corp.’s Satya Nadella, Pichai is a long-time lieutenant who steadily worked his way up the corporate ladder. More than 15 years after he joined the Mountain View-based company he’s replacing Page in the top job. Brin is stepping down as president, leaving Pichai as undisputed leader.

The shift reflects Google’s accession into corporate middle age. Started in a California garage by Brin and Page in 1998, the firm had revenue of $137 billion in 2018 and today boasts a market value of $893 billion. That’s behind only Apple and Microsoft on the S&P 500 Index.

Founder free

Other Silicon Valley giants are also founder free. Larry Ellison’s Oracle Corp. is headed by Safra Catz, though Ellison is still involved as the company’s chairman. Some younger companies -- such as Uber Technologies Inc. and We Co. -- have turned to outsiders amid turmoil

There are some notable exceptions. Jeff Bezos and Mark Zuckerberg are still at the helm of Amazon.com Inc. and Facebook Inc. respectively, which are the fourth- and fifth-largest US companies by market value.

Such a transition has proved to be a boon for Apple and Microsoft. The iPhone maker’s shares have risen by more than 400 per cent since Cook took the helm in August 2011 and Microsoft has quadrupled on Nadella’s watch.

Business Standard