Well-known tech companies are surpassing analysts’ expectations in reporting earnings this week, the latest sign that tech companies are increasingly finding ways to take in more money as we live more of our lives online.
On Thursday, several big tech names—including Twitter, Amazon, Google, and Microsoft—said they performed better in the third quarter this year than they did in the same period in 2016.
The success of the technology sector has helped push stocks higher in recent months. All the major stock indexes keep achieving record highs, with the tech-heavy Nasdaq up 25 percent in the last year.
The big tech companies have transformed themselves into household names and often seem to be the major force in U.S. economy. Because of the nature of their businesses and the dominance in their markets, nearly every move they make—such as Amazon’s purchase of Whole Foods and its hunt for a second headquarters; Facebook’s efforts to weed out fake news and Russian ads; Twitter’s experiments in doubling the number of characters in tweets—is shared online and scrutinized more than those of companies in other industries.
And increasingly, big tech is drawing scrutiny from lawmakers, who occasionally become uneasy about the companies’ influence, privacy policies, and market dominance. Next week, top lawyers from Facebook, Twitter, and Google will testify before congressional intelligence committees regarding alleged Russian influence in the 2016 election.
But despite the economic and psychological reach of tech companies, surveys show that technology work accounts for just 4 percent of U.S. employment.
The Wall Street Journal reports that big tech companies are expected to
That view is probably correct: A recent survey from the Pew Research Center found that 21 percent of Americans say they are online “almost constantly,” along with another 42 percent who say they go online a few times a day.
Here’s how the companies that reported earnings this week say they are faring:
Twitter: Since going public in 2013, Twitter has not had a profitable quarter but says that could change in the fourth quarter of this year. In the third quarter, it lost $21 million, which sounds like a lot—until you consider that in the same period a year ago, it lost $103 million. Revenue for the quarter was $590 million. It says its number of monthly active users is up about 4 percent in the last year, to 330 million. Twitter is actually one of the smaller tech companies reporting earnings this week, but it’s well-known.
Amazon: The tech giant crushed analysts’ expectations and said its profits for the quarter rose nearly 2 percent, to $256 million, on revenue of $29 billion. It touted progress on a variety of fronts, including improvements and expansions of its voice-controlled personal assistant, Alexa; streaming NFL football on Amazon Prime; and opening a new wind farm in Texas, its 18th renewable energy project.
Google: Google’s parent company, Alphabet Inc., said its profits rose 33 percent, to $6.7 billion in the third quarter, on revenue of $28 billion. In a conference call, executives said the amount of time people spend watching YouTube videos has increased 70 percent in the last year; it is planning to release 40 original shows on its video subscription service, YouTube Red; and its Pixel phones are selling well, TheStreet.com reported.
Microsoft: Microsoft made nearly $7 billion in the third quarter, up 16 percent, on revenue of $25 billion. The gains came mainly from the success of the company’s online software sales, such as its business productivity product, Office 365. Revenue also received a boost from last year’s acquisition of the business social networking company LinkedIn.
Facebook reports earnings next Wednesday; Apple releases its third-quarter performance next Thursday.
