On a virus by leaps and bounds – Hi-Tech – Kommersant

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On Tuesday, three large American IT corporations reported at once – Alphabet, Microsoft and Twitter. Companies in the last quarter recorded significant revenue growth. Among the reasons are the increased demand for cloud services and the growth of online shopping during the pandemic.

The rise of the decade for Alphabet

Alphabet, which owns the Internet search engine Google and video hosting YouTube, finished the third quarter of this year with revenue of $ 65.1 billion, which is 41% better than last year. The corporation has not had such a rapid growth in income for 14 years. The company’s net profit reached $ 18.9 billion, which is 68.3% more than last year.

In the pandemic, people have become less likely to shop, preferring to shop online. And retailers, faced with a new reality, rushed to invest in online advertising. Thus, in the last quarter, they provided Alphabet with such sales growth, which the company usually achieves in two years, The Wall Street Journal notes.

According to GroupM forecasts, the online advertising market will grow by 26% this year. And the main beneficiary of this growth will be Google.

Internet search advertising revenue grew from $ 26.3 billion in the third quarter of 2020 to the current $ 37.9 billion. In general, Alphabet’s advertising business brought in $ 53.1 billion in this quarter, which is 43% better than last year.

The company was significantly helped by the new Apple privacy policy, which now allows users of devices on iOS to independently decide who should be given the right to track their activities on the Internet, and who should not. The information collected helps advertisers to determine what exactly interests the user at the moment, and select ads that are relevant to him. Apple’s new policy, for example, has already seriously made life difficult for Facebook, which has lost some of its ad revenue, but has become a boon to Google as brands invest more money where there are no restrictions and where there is more information about users.

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Microsoft’s sky-high results

The first quarter of the new fiscal year was also overly successful for Microsoft. For the reporting three months, the corporation’s revenue reached $ 45.3 billion, thus increasing by 22% compared to the same period last year. This is the most significant revenue growth for Microsoft since 2018. The growth in net profit turned out to be even more impressive – immediately by 48%, to $ 20.5 billion.

Both metrics were significantly better than the forecasts of analysts surveyed by FactSet. Those expected that the company’s sales in this quarter will be $ 44 billion, and its net profit will be at the level of $ 15.7 billion.

This growth was due to the fact that many employees of companies, to the detriment of the pandemic, massively switched to remote or hybrid modes of work.

As a result, the world has seen a significant increase in demand for cloud services. Microsoft, meanwhile, is one of the key players in this market.

According to Gartner, Microsoft has a market share of 19.7%, second only to Amazon Web Services (about 40%). And this market, according to experts’ forecasts, will grow rapidly in the coming years.

Over the past quarter, Microsoft Azure’s revenue grew by 50%, and the entire cloud business of the corporation brought it more than $ 20 billion for the first time in one quarter. Its revenue grew by 36% in annual terms and reached $ 20.7 billion.

In addition, LinkedIn’s revenue grew 42% over the quarter. According to the company, the social network’s revenue for the last 12 months exceeded the $ 10 billion mark for the first time.

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Twitter Litigation

Twitter reported the completion of the third quarter of the year with a net loss of $ 537 million, but its shares in OTC trading are still growing by almost 4%. This is because the only reason for the negative balance in this quarter is a $ 810 million fine in a case against its own shareholders, who accused the company of overstating certain indicators in 2015. In September, the parties came to a friendly agreement, while the microblogging service did not admit their guilt.

Twitter’s operating performance in the third quarter met analysts’ expectations. Thus, the company’s revenue grew by 37% compared to last year and reached $ 1.28 billion. Almost all of this amount is advertising revenues, which grew by 41%, to $ 1.14 billion.

In many ways, this growth was facilitated by the Tokyo Olympics.

According to the company, 12 of the 14 official sponsors of the Olympic Games promoted their products on Twitter, and the event itself was reflected in 76 billion tweets. Twitter also benefited from the resumption of international tourism, which sped up growth in travel advertising by 40% and food delivery by 140%.

The number of daily active users bringing revenue to the service reached 211 million. This is 13% more than a year earlier. In the second quarter of this year, the growth in annual terms was 11%.

Finally, the company notes, Apple’s new privacy policy has had little impact on the microblogging service’s ad revenues. And in the foreseeable future, this trend will not change, are confident in Twitter.

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Kirill Sarkhanyants

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