Google owner Alphabet and Amazon post double digit revenue growth
Google-parent Alphabet and the online retail giant Amazon have both reported a near 20% rise in revenues for the latest quarter.
Alphabet said advertisers were spending more on its search and YouTube services. However, Amazon reported profits that were lower than expected, as it invests to speed up delivery times.
Both firms are under scrutiny from authorities in the US over their market dominance, alongside other tech firms.
Amazon, which is shifting away from buying and selling products itself, and focusing on its role as a marketplace for other merchants, reported revenues for the latest quarter of $63.4bn (£51bn).
“Customers are responding to Prime’s move to one-day delivery – we’ve received a lot of positive feedback and seen accelerating sales growth,” Jeff Bezos, Amazon founder and chief executive, said in Thursday’s news release.
Amazon’s profit for the quarter, at $2.6bn, were below Wall Street’s expectations and the firm said profits would slip slightly in the current quarter.
After-tax profits at Alphabet, the firm that owns YouTube and Google, tripled compared to a year ago to $9.9bn, beating analysts’ expectations. Alphabet’s revenues rose 19% compared to a year earlier, to $38.9bn.
Sundar Pichai, Google’s chief executive, said both its traditional services and new technology such as artificial intelligence were fuelling the firm’s growth.
“From improvements in core information products such as Search, Maps and the Google Assistant, to new breakthroughs in AI and our growing cloud and hardware offerings, I’m incredibly excited by the momentum across Google’s businesses,” he said.
But the strong financial performance comes at time when regulators are beginning to flex their muscles around the tech giants.
The EU has imposed three fines on Google over the last two years over competition issues, totalling more than $9bn. Brussels has also just launched an investigation into whether Amazon’s use of data on its marketplace breaches EU competition rules.
The US Department of Justice (DoJ) announced earlier this week it was opening a broad investigation of major digital technology firms in what one analyst described as a “major shot across the bows” of those companies.
While the DoJ did not identify specific firms by name, the scope of the investigation is widely believed to include Alphabet and Amazon as well as Facebook and potentially Apple.
The DoJ said its review would consider “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers”.