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Google parent Alphabet whiffs on sales amid controversies – CNET

Google headquarters in Mountain View, California. 

Stephen Shankland/CNET

Google's facing its most tumultuous period in history. Now its business -- which was always a bright spot amid the scandalous headlines -- is facing issues, too.

In the first three months of the year, Google's parent, Alphabet, tallied $36.3 billion in sales, missing analyst estimates of $37.3 billion, the company said Monday. Earnings per share were $9.50. Analysts on average had expected $10.61 per share, according to an estimate by Thomson Reuters.

Alphabet also took a $1.7 billion hit in the first quarter, when the European Commission in March fined the search giant for "abusive" advertising practices. The company said the charge affected its profits. Without the fine, Google's profit would've been $11.50 a share.

The company's stock fell more than 4 percent in after hours trading.

"We delivered robust growth led by mobile search, YouTube, and Cloud," Ruth Porat, Alphabet's CFO, said in a statement. "We remain focused on, and excited by, the significant growth opportunities across our businesses."

The disappointing results mark the latest issue for the search giant as its biggest issues have spilled into public view. Google's employees have protested the company's military contracts, its work in China and the company's handling of sexual assault allegations directed at executives. CEO Sundar Pichai has also been dragged in front of Congress to defend Google over accusation of political bias.

More recently -- in this quarter alone -- Google has faced intense scrutiny over YouTube's inability to police the content on its platform. The video service has been accused of prioritizing growth over the safety of its users. The criticism crescendoed after a shooter livestreamed himself while gunning down worshippers in a mosque last month. YouTube wasn't able to contain the video's spread on its platform, and it was uploaded tens of thousands of times.

Google also faced a dustup over its artificial intelligence ethics board, made up of outside experts in the field. The company faced scrutiny for picking Kay Cole James, president of the conservative think tank the Heritage Foundation, who was accused of having anti-trans and anti-immigrant biases. Google eventually disbanded the board after only a week.

The company has also been criticized for its Sensorvault database, which police departments across the country have tapped for location data when trying to crack criminal investigations. Congress last week sent a letter to Pichai demanding answers about the database. 

Alphabet on Monday also said its "other bets" business -- which focuses on more experimental initiatives like driverless cars, medical tech and delivery drones -- lost more money in the past quarter than it did over the same period last year. Operating losses were $868 million in the the first quarter, versus $571 million the year before.