Tech giants revenues soar as they come under increased scrutiny

Amazon and Alphabet each reported revenues up by a fifth in the latest quarter – in results published as US tech giants come under increasing scrutiny from regulators.

Online retail giant Amazon said sales were up 20% to $63.4bn in the three months to June – though a 4% rise in profits to $2.6bn fell short of analysts’ expectation sending shares lower in after-hours trading.

Alphabet, owner of Google, saw revenues rise 19% to $39.9bn while its profits trebled to $9.9bn – compared to a period last year when it paid a $5.1bn EU fine – sending the stock sharply higher in post-close Wall Street deals.

The figures come in the same week that the US department of justice launched a review of whether “market-leading online platforms” were behaving in a way which reduces competition, stifles innovation or harms consumers.

Amazon’s sales were boosted by its investment in speedier delivery for its Prime customers – an investment which also dented its profits.

Founder and chief executive Jeff Bezos said: “Customers are responding to Prime’s move to one-day delivery – we’ve received a lot of positive feedback and seen accelerating sales growth.”

Companies such as Google would be hit
Image: Google owner Alphabet saw profits treble

The move comes as Amazon faces increasing competition from the US rivals such as Walmart and Target, which are also speeding up deliveries.

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Amazon’s results come after its recent announcement that it would hire 2,000 new employees in the UK in 2019, taking its permanent workforce to 29,500 by the end of the year.

Meanwhile, Alphabet’s update reassured investors and analysts who had been disappointed by slowing advertising revenue growth in the first quarter.

This was better than expected in the latest period, while chief financial officer Ruth Porat allayed fears about action taken against objectionable content on its YouTube platform.

She said this had “virtually no impact” on ad sales.

Google chief executive Sundar Pichai addressed regulatory concerns in a call with analysts after the results were published on Thursday evening.

He said: “Even in the US we have engaged in the process before.

“To the extent we have to answer questions we will do so constructively.”

Other tech giants such as Facebook are also under the spotlight of US authorities – with the social media giant earlier this week hit by a $5bn fine from the Federal Trade Commission over the misuse of user data.

Source: SKY NEWS

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