Gemma Houghton

Biggest Tech Winners And Losers Of Q1 2016

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Global Marketing News – 4th May 2016

As the world biggest tech companies release their first quarterly figures of this year, we’re going to look at who the winners and losers were in the first three months of 2016.

Facebook was the big winner this quarter, with figures showing high growth levels of a 52% annual hike in earnings, in Quarter 1.

This amounts to around 5.4 billion US dollars, with 82% of that coming from the company’s mobile advertising.

The site’s monthly active users have jumped up as well, with a 21% year-on-year increase to what is now a staggering 1.65 billion users per month.

Mark Zuckerberg commented on the success by stating that the good start to the year was because Facebook is focussed on a “10-year roadmap to give everyone in the world the power to share anything they want, with anyone.”

Internet retailer Amazon also shared good news, by vastly exceeding its quarterly estimates, taking 2 billion US dollars over its forecast turnover.

With a net income for the first quarter of 513 billion dollars, and a revenue of over 29 billion dollars, the new figures for this year compare with 22.7 billion dollars in revenue in the first quarter of 2015.

This news confirms that Amazon have now had four straight quarters of positive earnings, which will answer questions as to whether the company can remain profitable, despite spending on new ventures such as Amazon Logistics.

Other companies that performed well included LinkedIn, whose revenue has grown by 35% compared to the same period in 2015, to 828.5 million dollars.

Search engines Baidu and Yandex also performed very well, with Chinese Baidu reporting a 31.2% year-on-year increase, pulling in 2.45 billion US dollars since the start of this year.

Similarly, Russian search engine Yandex performed even better with a 34% growth in revenue, bringing its total for this quarter up to 243.7 million dollars.

However, amongst all the news of increased earnings for a handful of some of the biggest companies in the world, others perhaps had less to celebrate.

Apple in particular had a bad week, announcing that it sold 51.2 million iPhones during the last quarter.

That number is down from 61.2 million units sold during the same period in 2015.

Notably, this is the first time sales of the product have decreased since the first generation iPhone was released in 2007.

This news meant that the company’s revenue for the first quarter has fallen by 13% since last year, bringing the total to just over 50 billion US dollars.

News wasn’t much better for Google’s parent company, Alphabet either, as the second most valuable public company in the world saw a fall from its forecasted results.

For the eighth time in the last twelve quarterly reports, Alphabet has missed its forecast, this time by 6%.

Whilst Google is performing well itself, with paid clicks jumping by 29% year-on-year, Alphabet saw an operating loss of 801 million dollars, up from 633 million.

Analysts have said that this was likely caused by lack of profit from the company’s ‘Other Bets’ projects, which include life-sciences research organisation, Verily, and fast-internet provider, Fiber.

Meanwhile, Yahoo also suffered, reporting a sharp first-quarter drop in revenue of 18%.

On top of this, the company expects an even bigger drop of 20% by the end of the second quarter, in June.

When asked why Apple and Google were not succeeding where Facebook was, Brandon Geisler of Marsico Capital said that Mark Zuckerberg’s company was doing so much better than Apple and Google because it had embraced the switch to mobile, and away from desktop, early on.

According to Geisler, Facebook “invested heavily in front of [the switch to mobile] and is reaping the benefits.”

Apple has admitted that large parts of its future lie in the creation of software and services for the hardware it has already sold, and not in creating new hardware.

Similarly, Google has recently concentrated more of its efforts on project such as driverless cars and superfast internet in an attempt to move away from desktop limited business.

Webcertain’s global marketing news bulletins are daily 5-minute videos, providing marketers with the latest international digital marketing news in an easy-to-digest format.

Gemma Houghton

Gemma Houghton

Marketing Manager at Webcertain
Gemma has been working in international search for 6 years and leads Webcertain's marketing team. As well as managing Webcertain’s global online and offline marketing activities, she also organises and programs WebCertain's International Search Summit, a search marketing conference focusing on international and multilingual online marketing and contributes regularly to the Webcertain blog. She has also spoken at conferences such as SES and SasCon and writes regularly for State of Digital. Gemma holds a Professional Diploma in Marketing from the Chartered Institute of Marketing and a BA Joint Honors Degree in French and German.
Gemma Houghton

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