For more than a year,
Alphabet
’s
(GOOGL) Google has successfully avoided the social-media slapdown that has dogged
Facebook
(FB) and
Twitter
(TWTR) by taking the late Marcel Marceau’s approach: deathly silence.
While its peers were being grilled by federal lawmakers, bashed by Wall Street analysts, and dissected by a ravenous press, Google was absent—down to the empty seat representing the company at last month’s Senate Intelligence Committee hearing. Twitter CEO Jack Dorsey and Facebook Chief Operating Officer Sheryl Sandberg testified there.
That silence will soon be broken. President Donald Trump is scheduled to meet with Google CEO Sundar Pichai at the White House, along with other social-media and technology representatives, probably in mid-October, White House chief economic adviser Larry Kudlow said on Tuesday. The administration hopes Facebook and Twitter also will attend, he said.
“We’re going to have a little conference—the president will preside over it—we will have big internet companies, big social-media companies, search companies,” said Kudlow, who met with Pichai on Friday. “And some who are dissatisfied with those companies.”
Google and Facebook did not immediately respond to email messages seeking comment. A Twitter spokesman said the company had yet to hear from the White House.
Google’s reluctance to weigh in on what has been a year-long referendum on the state of social media, and whether it should be regulated, so far has proved to be a savvy strategy. The company’s stock is up 15% this year (through Monday’s close), compared with Facebook (down 10%) and Twitter (up 18%) over the same period. (Twitter, though, has seen its stock eviscerated 38% since mid-June as concerns mount over how Dorsey Co. plow resources—that is, money—into defending the service without cutting into earnings.)
Google has largely avoided the national debate on the dangers of data breaches, such as the one that affected 50 million Facebook users last week, and the saber-rattling over content on social media—real and fake. The strategy has been savvy but not sustainable, amid heightened calls for the search-engine giant to explain how it is addressing security and privacy issues.
This is especially true in a climate of high-profile security snafus, questions about the vulnerability of social-media forums to foreign meddling with the upcoming midterm elections, and accusations of political favoritism.
“The pressure has escalated on Google,” Cory Cowgill, chief technology officer of Fusion Risk Management, tells Barron’s. “Their absence on Capitol Hill drew way more attention to them” for not speaking up.
Meanwhile, shares of Facebook tumbled 1.5% to $159.98 on Tuesday following a skeptical note from Deutsche Bank on the company’s advertising prospects and their impact on revenue in 2018 and 2019.
“While some of our conversations in the ad community remain positive, we are starting to hear more cautious feedback and the company seems on the defensive, particularly post last week’s data breach disclosure and the recent press around shadow advertisers,” Deutsche Bank analyst Lloyd Walmsley wrote in a note to clients. He maintains a Buy rating and a target price of $205 on Facebook shares.
Investors are just as jittery that Facebook could face a fine of up to $1.63 billion if European regulators determine its latest breach severely impacted EU residents.
Meanwhile, Trump and other prominent Republicans, including House Majority Leader Kevin McCarthy (R., Calif.), have accused Twitter, Google, and Facebook of muffling—if not outright censoring—conservative views on their platforms. The issue reached a crescendo in August, with the ouster of far-right commentator/conspiracy theorist Alex Jones by Twitter, Facebook,
Apple
(AAPL), Google, and
Spotify Technology
(SPOT).
Each company has denied its content decisions are influenced by politics.
Write to Jon Swartz at jonathan.swartz@dowjones.com
Article source: https://www.barrons.com/articles/mr-google-goes-to-washington-1538508906