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Profits surge at US tech giants

April 28, 2017

Booming sales of web services have boosted the profits of Microsoft and Amazon, while Google parent Alphabet reported solid growth in ad revenue that helped it cover rising costs of its "moonshot" projects.

PT Konkurrenz Google und Amazon
Image: Getty Images

In the first quarter of 2017, Google parent Alphabetwas able to increase its profit by 29 percent jump to $5.4 billion, while revenue jumped 22 percent compared with a year ago to $24.75 billion.

"Our excellent results represent a terrific start to 2017," chief financial officer Ruth Porat said, adding that the company benefitted ongoing investments in product innovation which had injected "great momentum" in its businesses across the group.

As in previous quarters, search engine Google delivered the overwhelming majority of revenues for the company with $24.5 billion. Alphabet's so-called "other bets," which include smart home devices, self-driving cars and life sciences, took in $244 million in revenue but delivered an operating loss of $855 million.

The stronger-than-expected results helped lift Alphabet shares more than four percent in after-hours trade on Wall Street. However, the results did not appear to show a major impact of an ad boycott of Google's YouTube earlier this year after revelations that programmed ads were placed alongside videos showing hateful content.

Porat told a conference call that "YouTube revenues continued to grow at a significant rate driven primarily by video advertising." Google has promised new efforts to match advertisers with appropriate content, using artificial intelligence, in response to complaints.

Google chief executive Sundar Pichai cited "fantastic momentum" for a variety of products including its Google Assistant, the smart home device that competes with Amazon's Alexa-powered speakers. Pichai said the device is one element in a strategy focusing on artificial intelligence, or machine earning.

"Advances in machine learning are helping us make many Google products better," he said.

Intelligent assistants: Talk to me!

04:59

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Amazon India becomes money spinner     

Online retail giant Amazon also delivered stronger-than-expected financial results for the first quarter, when profit rose 41 percent from a year ago to $724 million, on revenues growing 23 percent to $35.7 billion.

Amazon is leveraging its position as an online retailer to push into streaming video, cloud computing and other segments as it expands its global footprint.

Amazon founder and chief executive Jeff Bezos used the earnings report to highlight the company's efforts to expand in India. "Our India team is moving fast and delivering for customers and sellers," Bezos said.

Bezos also said that its platform there was the most visited and the fastest growing marketplace in India, pushing the company to invest more in technology and infrastructure "while working hard to invent on behalf of our customers and small and medium businesses in India."

India's e-commerce growing

01:22

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A big chunk of growth came from Amazon Web Services, the huge cloud-computing unit that powers internet services for business, and garnering revenue of $3.7 billion, up 43 percent.

Amazon also has been pushing into artificial intelligence and home automation with its Alexa-powered devices which serve as digital assistants. Alexa was one of the big winners at this year's Consumer Electronics Show in Las Vegas, cropping up in TVs, cars, fridges etc., in what appeared to be a breakthrough moment for the smart technology. 

Microsoft strong in the cloud

Strong business in Microsoft's cloud business helped the US software giant to 28 percent higher profits between January and March - the company's third fiscal quarter.

In the period, Microsoft earned $4.8 billion, which amounts to 61 cents a share. The company posted revenue of $22.09 billion, up 8 percent from $20.53 billion a year ago.

As sales of Windows PCs decline, CEO Satya Nadella has been

pouring money and resources into remote data centers that deliver the company's services online to smartphones, tablets and other devices. Businesses and government agencies are increasingly turning to such "cloud computing" services, which is helping Microsoft move on from its old software business.

uhe/mds (Reuters, AFP, dpa)

 

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