Amazon & Facebook Beat Expectations

Amazon & Facebook Beat Expectations

over 3 years ago1 min

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Amazon and Facebook both opened up their box of tricks to reveal better-than-expected second-quarter results late on Thursday, and investors initially joined in the celebrations by buying up their stocks 🎉

What does this mean?

Amazon reported better-than-expected revenue thanks to a rise in demand for online shopping, and its profit massively outstripped forecasts as well – despite $4 billion worth of additional coronavirus-related expenses. Looking ahead, Amazon reckons it’ll earn more than investors forecast this quarter too.

Source: The Wall Street Journal
Source: The Wall Street Journal

Now to Facebook: the advertising behemoth revealed a bigger-than-expected increase in monthly active users, pushing its quarterly revenue and profit past forecasts. It turns out that when you have eight million ad partners to your name, big-name boycotts don’t actually have that much of an impact on earnings 🤷‍♀️ If anything, Facebook is more focused on the receding pandemic: the company thinks the recovery will keep active user numbers from rising as the year goes on.

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Why should I care?

Twitter’s weaker-than-expected revenue report last week hinted at still-slowing advertising revenue growth for social media platforms, but Facebook looks like it might’ve been hoovering up advertisers’ money at its rival’s expense 💵 That’s a strategy Amazon knows well: its own advertising business grew 41% – compared to Facebook’s 10% – and is now six times the size of Twitter’s overall.

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On Wednesday, the US government challenged the CEOs of Amazon, Facebook, Alphabet, and Apple on the amount of influence they have. And with good reason: 35% of the world uses Facebook, while Amazon controls 40% of US ecommerce 🇺🇸 Big Tech may even be forced to break apart if the Democratic Party wins big in November’s US election – an increasingly likely outcome.

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