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The quarterly results that come, Google, Facebook, Amazon, Apple, Microsoft do not want to be seen as debt collectors of the coronavirus crisis
Washington: The big tech companies that will report quarterly results in the coming days face the challenge of highlighting their roles in fighting the coronavirus pandemic without looking like they are taking on the health crisis disorder.
The normal conversation about profit and revenue projections is likely to be replaced by discussions about how the world’s most powerful companies are helping research for a COVID-19 treatment, protecting workers, and easing the pains of closeted consumers.
Quarterly updates will be received this week from parents of Google, Alphabet, Facebook, Microsoft, Amazon and Apple, all of whom will see an impact of the pandemic.
The new coronavirus crisis has disrupted operations at technology hubs known to disrupt traditional businesses.
Fewer people are buying new smartphones; More and more people are online and using social platforms, but online advertising is declining; cloud computing needs are growing; and more consumers depend on the delivery of essential goods from Amazon.
Shareholders vs. consumers
Tech companies will highlight their social responsibilities but will also send a message to shareholders and investors, said analyst Jack Gold of J. Gold Associates.
“They will tell people how many jobs they are creating, how many local businesses they are driving, they will talk about their charitable contributions,” he said.
Amazon will receive special scrutiny for its importance to essential goods and for employee safety concerns for its warehouse, store and delivery personnel.
Building goodwill
Some tech companies are creating goodwill with their efforts, such as the Google-Apple collaboration to help viruses “track contacts” by allowing their smartphones to communicate across platforms.
But it also shows that companies “are penetrating deeper into our lives,” said David Bchiri of consulting firm Fabernovel.
“This is increasing our personal and professional dependence on them.”
Google has also offered free access to its Stadia gaming service and online meeting services, while Apple has given consumers free access to some of its television broadcast content.
Microsoft, which is likely to see gains in cloud computing services, has spearheaded the use of artificial intelligence in virus research and has offered free services to nonprofits.
Advertising agitation
The online advertising market dominated by Google and Facebook is in disarray due to economic conditions and the reluctance of marketers to post messages along with grim content about the pandemic.
“You can see three weeks later how the advertising has changed,” said David Sidebottom of Futuresource Consulting.
Online ad costs have decreased, which will likely mean lower revenue for companies like Facebook and Google.
Sidebottom said these firms have “large cash reserves (and) will be able to resist this.”
But the full impact of the pandemic may not be seen in the latest quarterly results, said Bob O’Donnell of Technalysis Research.
Companies “didn’t start to feel any impact until the end of the first quarter,” he said. “That doesn’t tell us much about the second quarter.”
Burnished image?
Managing the crisis could change what happens next to companies that have faced a backlash from consumers and investigations into how they have wielded power.
The crisis “changes the public perception of these companies if they are helping” to contain the outbreak, Gold said.
“At the same time, it makes them stronger. More and more people are spending more time online talking to their friends. “
This may not prevent a wave of antitrust activity after the health crisis subsides.
“People have few memories,” said Carolina Milanesi of Creative Strategies.
“Once we’re out of this, for Facebook in particular … it’s a necessary evil right now, but it doesn’t mean you forget how you feel about it.”
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