Big Tech Is More Important Than Ever With Alphabet Even Reaching New Horizons

With the latest earnings, it became clear that the pandemic push was just the beginning for Big Tech as Apple AAPL, Google owner Alphabet GOOG, Amazon AMZN, Facebook FB, and Microsoft MSFT were showered with money during first quarter, so much that even Wall Street that expected strong results was surprised. Although this success wasn't limited to tech titans as smaller companies such as chip designer AMD AMD as well as social networks Snap SNAP and Pinterest PINS also delivered strong results, Big Tech showed it is on the ride of a lifetime as in every minute of the first three months of this year, Apple, Alphabet, Amazon, Facebook, and Microsoft combined sold products and services worth about $2.5 million. Profits before tax for the period came in at $88 billion which translates to more than $1 billion of profit for every working day. But with its latest venture into healthcare, Alphabet could possibly reach even new heights.

The Success Scale Of Big Tech Means They Can Rival Countries On Some Metrics

Alphabet, Apple and Microsoft combined spent $50 billion on their R&D efforts in their 2018 financial years. To give you a better idea, that was equivalent to R&D spending by the whole UK economy, according to the most recent data by Office for National Statistics.

Online Advertising Is Booming

Facebook said demand is so high that the average price it charges for ads rose by 30% YoY compared with the start of the pandemic. Alphabet's revenues rose by a third-year thanks to Google's advertising business. Moreover, Alphabet was also helped by fast growth in cloud services under which it offers companies access to data centers, as it thrived during the pandemic-induced home office trend.

Directing Funds Into Pushing Boundaries

Although Alphabet has scaled back some of its spending on the so-called "moonshot" programs, it is still investing heavily in an effort to push the boundaries of what computers can do. At the same time, it still judged that it had $50 billion lying around to buy back shares.

Venturing Into Health-Care

If 2020 has taught us anything, it is the importance of good health and Google didn't waste time to tap into this rapidly accelerating field as it entered into a new venture with the Tennessee-based hospital chain HCA Healthcare. Under the partnership, Google Cloud will work to develop algorithms based on the provided patient records with the aim to improve the efficiency of the provided services as well as patient outcomes. At the moment, the healthcare industry has a ton of electronic medical records that aren't being fully utilized. But harnessing them in any way that generates more empirical data that can be of use to practitioners while diminishing reliance on anecdotal evidence could truly make a difference and help patients. So, if Google can pull this off- it will be a big deal or more precisely, monumental.

Regulatory Clouds On The Horizon

Tech companies are facing increased regulatory pressures across the globe with Germany, France, and the Netherlands complaining that the EU is not tough enough on Big Tech and called on regulators to make it harder for big tech to rule the world. France fined Google 100 million for breaching rules related to online cookies or in simple words, advertising trackers. Amazon was fined 35 million euros in the same incident in December last year. According to the WSJ, Google has offered to remove the offending technical barriers for competitors to settle the antitrust lawsuit but even if it manages to settle, the tech giant is still likely to pay a fine for its practices till now. Google is also facing similar lawsuits in Texas and a class-action lawsuit over gender-based wage disparity in California.

Outlook

Since Covid-19 started its relentless march across the globe, Big Tech quickly went from a defensive mode in times of uncertainty to impressive growth. It is clear that the digital revolution is here to stay, and whether regulators like it or not, these businesses have embedded their products and services deeply in our lives. By the looks of it, Big Tech is working hard on deepening the relationship with the world's population even further.

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