It's earnings season! Netflix and Snapchat began informing markets of their financial performance this past week but the main draw remains to be tech titans, including Microsoft and Facebook parent Meta, who are expected to release details of the billions they generated in third-quarter sales (and perhaps profit too?) in the following days.
Netflix's third-quarter net income wasn't anything to sneeze at: the streaming giant posted a cool $1.4 billion in profit but that's not what caught everyone's attention. The company said it added 2.4 million new subscribers to its service, a good 1.4 million above what it had expected. “Thank God we’re done with shrinking quarters,” Co-Chief Executive Reed Hastings said after the results were released.
Markets went nuts following the announcement, helping reverse a downward trend in Netflix's share price this year. Industry observers say Wall Street is reassured by the subscriber growth, especially as Netflix gears up to introduce an ad-enabled streaming plan to eat into the global TV business and cracks down on password sharing in the near future in an attempt to make more money.
Netflix was trending #49 this week.
Snapchat Paints Bleak Picture 📸
Of course, what the market giveth, it also taketh away. And so was the case with Snapchat which continued to be battered by investors in the wake of its third-quarter results. The messaging app sounded the death knell for digital advertising after it painted a bleak picture for the future, noting that it does not expect its revenue to grow year-over-year during the holiday season when marketers typically go full ham on advertising.
The announcement is widely being viewed as a glimpse of how inflation is eating into the bottom lines of platforms reliant on digital ad revenue (think Meta, Google, Pintrest) and is the latest in a series of unfortunate events for social media platforms that are already facing intense competition from TikTok and are navigating changes to Apple's privacy rules that makes it difficult for said platforms to display personalized ads, causing billions of dollars in lost revenue.
Google ranked #2 this week, while Apple was trending #9 on the Tech Company Rankings.
"Alexa, find me a .gif that says bye-bye" 👋
Meta needs to say bye-bye to Giphy, the gif search engine responsible for lightening up almost every conversation here at HackerNoon. After a some-what lengthy spar with the UK's competition regulator, the social media giant has been ordered again to let go of the service over concerns that the $315 million acquisition could harm competition.
The UK Competition and Markets Authority first blocked the merger in November 2021, prompting an appeal from Meta which downplayed the competition concerns. But the latest order seals the merger's fate and Meta has already accepted defeat.
Meanwhile, Meta's Facebook is threatening to block news sharing on its platform in Canada if the government decides to pass a law that would force digital platforms to pay news publishers. The legislation would be similar to the one passed by Australia last year but remains at an early stage at the moment and will likely go through amendments if it ever becomes law.
Facebook ranked #1 in this week's Tech Company Rankings. Its parent, Meta was ranking #12.
Ads, Ads Everywhere 🤑
Despite underpaying and exploiting its drivers, Uber is still not able to make a profit. So it's taking a plunge into a completely new space: in-app advertisement. Gone are the days when the internet was meant to be a way for you to freely express yourself, instead turning into this weird dystopia where all anyone ever wants to do is to sell you…stuff.
Uber would be following in the footsteps of companies like foodpanda and rival Lyft who have introduced in-app advertisements in an attempt to diversify their revenue streams.
Uber ranked #58 in this week's Tech Company Rankings.
Now that the world's richest man is close to acquiring Twitter, he has already laid out plans for what he plans on doing first: lay off nearly 75% of the company's staff.
Even if Elon Musk somehow decides to wash his hand off of the acquisition, Twitter's current management plans to bring down the axe in an attempt to save about $800 million by the end of next year.
Meanwhile, Musk's Tesla announced a price cut in China in an attempt to win back demand for its electric vehicles. "The price cuts underscore the possible price war which we have been emphasising since August," said Shi Ji, an analyst with CMBI, was quoted as saying by Reuters.
Twitter was trending #47, while Tesla was trending #73 in this week's Tech Company Rankings.
And that’s a wrap! Thanks for reading Tech Company News Brief Issue #21! See y’all next week. PEACE ☮️
— Sheharyar Khan, Editor, Business Tech @ HackerNoon
