Tech Talk – 26 July 2013

Tech Talk – 26 July 2013Investors rewarded Amazon’s (AMZN) first quarter earnings announcement on Thursday with a slim gain during trading on the back of a 22 percent increase in revenue during the quarter.  However, net income for the quarter fell 37 percent to 18 cents per diluted share, from 28 cents a share in the same quarter a year ago.  The company is in strong competition with Apple (AAPL), Netflix (NFLX), and Hulu (owned by Walt Disney Company (DIS), a subsidiary of Comcast (CMCSA), and News Corporation (NWSA)) for the pole position in the lucrative digital content distribution market.

Amazon has also been accelerating investments into warehouses, data centers, and digital content.  According to founder and CEO Jeff Bezos, ‘Amazon Studios is working on a new way to greenlight TV shows.  The pilots are out in the open where everyone can have a say, our customers will determine what goes into full-season production.  We hope Amazon Originals can become yet another way for us to create value for Prime members.’  Amazon shares are currently down in after-hours from a close of $ 303.40.

Facebook (FB) surged more than 29 percent after it reported better than expected results for the quarter just ended.  Revenues jumped by 20 percent and showed signed that the company is making progress in monetizing mobile – 41 percent of ad revenue came from mobile.  However, some analysts remain cautious; while active users increased 21 percent to 1.15 billion, most of the growth in active users was in developing countries.  According to analysts, a new user in Asia is equal to 75 cents in ad revenue while a new user in North America nets the company more than $ 4.00.  Shares in Facebook continued to climb in after-hours trading.

Meanwhile, Zynga (ZNGA) CEO, Don Mattrick, hinted that changes were in store for the social gaming company.  Speaking during the company’s second quarter earning call, Mattrick acknowledged the company has been ‘missing out on the platform growth that Apple (AAPL), Google (GOOG), and Facebook (FB) are seeing.’  In light of the announcement, shares of Zynga fell more than 10 percent in after-hours trading.

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About the author

Audrey is a senior editor for the business and finance sections.