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the Covid-19 explodes the profitability of Gafam – RT in French

Amazon in the lead, the tech giants have greatly benefited from the global health crisis. For the first quarter of 2021, their financial results even exceeded their expectations. All at the expense of the traditional economy.

Silicon Valley has delivered a copy rife with excellent financial results for the first quarter of 2021, and those of Amazon, released on April 29, did not disappoint investors after a year of pandemic that propelled digital devices and services as an essential product for consumers.

Big tech companies are in the right place at the right time. The Covid-19 has accelerated [leur] profitability

Amazon, the world leader in e-commerce and the cloud (remote computing) more than tripled its net profit, to $ 8.1 billion for the period from January to March. The group also largely exceeded its own expectations and those of the market with a turnover of 108.5 billion dollars.

As AFP reports, the company’s performance is driven by sales on its e-commerce platform, particularly in North America, but also by business services on its marketplace ($ 24 billion , + 64%) and advertising revenue ($ 7 billion, + 77%). AWS, its cloud division, is not to be outdone, with 13.5 billion in revenue, up 32% year-on-year.

“We have seen many companies decide that they no longer want to manage their own technology infrastructure. […] We believe that this trend will continue during the post-pandemic recovery, ”said the group’s chief financial officer, Brian Olsavsky, as quoted by AFP.

“Big tech companies are in the right place at the right time. The Covid-19 has accelerated the digital transformation in education, health, teleworking and e-commerce, and improved the profitability of these firms ”, for his part noted Darrell West, a researcher from the center for innovation technology at the Brookings Institution.

Tech giants stab the traditional economy

Whether capitalizing on the time people spent online, on their transactions or purchases of electronic devices, the tech giants made exuberant profits in early 2021, as the traditional economy suffered from travel restrictions and activity related to the pandemic.

Alphabet, parent company of Google, achieved 55.31 billion in turnover from January to March, or 34% more than a year ago. Since last spring, the search engine and its neighbor Facebook have invested heavily in tools and platforms to facilitate online transactions, and encourage households and merchants to use their services, already very popular for entertainment or research. information. They thus consolidated their hold on the global digital advertising market.

According to research firm eMarketer, Facebook is on track to exceed $ 100 billion in net advertising revenue for the first time in 2021, and thus retain the second position in terms of global market share (23.7%), behind Google (28.6%), and far ahead of Amazon (5.8%).

“Our activities have performed better than what we expected”, admitted on April 28 Mark Zuckerberg, the boss of the social network.

Over the January-March period, Facebook and Apple saw their net profits double to $ 9.5 billion and $ 23.6 billion, respectively. The Cupertino company has exploded its sales of iPhone (+ 66%), iPad tablets (+ 79%) and Mac computers (+ 70%).

The tendencies for regulation on the part of Europe and also of Washington appear as the only possible clouds on the horizon of the west coast of the United States, where the headquarters of the Gafam are located.

Facebook and Google are already facing lawsuits from US authorities on the competition law front, and Apple and Amazon are targeted by similar investigations.

In April, the Russian Anti-Monopoly Agency fined Apple 12 million dollars (10 million euros) for having “abused its dominant position” in the distribution of applications. mobile. The American company, for its part, has announced that it is appealing this fine.

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