Tech Giants Unscathed by Economic Downturn Brought on by Coronavirus
By Space Coast Daily // May 2, 2020
When coronavirus was beginning to spread fast across the globe and it became evident that the world is facing a sharp economic downturn, nobody bet that the largest technology companies would be spared.
The world watched as the majority of businesses, both large and small, closed up shop and working from home became the new norm.
Many employees who don’t provide an essential service had to embrace this new reality. The story for most tech giants, however, couldn’t be more positive.
As the World Shuts Down, Tech Giants Are Thriving
Even as the outlook for the coming weeks remains bleak, the largest names in technology seem to be almost immune from the impact of the outbreak.
As lockdown measures imposed by authorities to lessen the impact of the pandemic have changed the way people access products and services, the likes of Amazon, Facebook, Microsoft, Netflix, Google, Apple have taken center stage to help manage the crisis.
It’s no surprise that the commodity channel index oscillator revealed that the Covid-19 outbreak is behind the current share price surges of Amazon and similar companies like Netflix. These companies continue to thrive under the current difficult circumstances.
Amazon, for instance, is hiring additional people as their orders have increased and this could continue to be the case for quite some time, until the virus is suitably contained.
The most popular and reliable streaming platforms Netflix and YouTube have also recorded an increase in demand for content streaming.
Now that a significant share of the global population are in lockdown, most of them spend a long time streaming videos to keep them entertained indoors. Downloads of the Netflix app have risen in Spain, Italy, and the U.S. since lockdowns began.
As for Alphabet’s Google, it may have taken a hit in terms of slowing paid advertising campaigns, but that does not spell doom for the company as a whole, which is doing well in other ways.
As a large proportion of employees at companies and organizations are working from home, usage of cloud computing services is on the rise, and Google is a significant player in that field. Microsoft is another example of a company benefiting from increased demand for software that supports cloud computing. Its business messaging tool has seen a 37% increase in the number of daily users.
Facebook has seen an increase in live videos, video calls, and messaging. It’s messaging app WhatsApp has also reportedly seen higher traffic.
Recently, researchers have come up with a Facebook powered heat map, which is helping with real-time tracking and monitoring of the spread of coronavirus. Scientists as well as health authorities can rely on the map to easily identify Covid-19 hotspots, and respond with the necessary measures.
Zoom, a video conferencing software and app, is proving to be very helpful for virtual meetings. It has helped many organizations keep in touch with their home-based employees and help them work together effectively. Teachers are also using it to ensure that students keep up with their coursework now that there isn’t a clear timeframe for the end of the pandemic.
Not all Tech Companies Are Benefiting
While there are businesses whose sales have skyrocketed during this pandemic, others have been suffering from the fallout. The largest tech companies are reaping the benefits.
With the U.S currently at 1 Million COVID-19 cases and counting, the tech giants will probably be the biggest winners under the unprecedented circumstances.
Companies like Lyft, Uber, and Airbnb are currently trying to find ways to turn the circumstances in their favor. Lyft and Uber are both commercial platforms that connect riders and drivers to help them get from one place to another.
Uber is less affected because it’s cashing in on higher demand at its other unit, Uber Eats, a food delivery service. Airbnb is an online broker for accommodation mostly for tourists, provided by individuals willing to rent out their property. Currently, with travel restricted, there’s not much activity on the Airbnb platform.
Tech Companies Doing Good
It wouldn’t be fair to just concentrate on tech companies’ ability to ride out the coronavirus pandemic from a business perspective.
They are also on the frontline in helping the world manage the impact of the virus on others. Not only are they financially contributing to good causes but also helping fight fraud and misleading information that could cause unnecessary alarm.
Facebook, for example, has offered small businesses grants and ad credits worth a total $100 million dollars. Amazon said it will increase the current minimum wage for its workers by $2 per hour. The company is also set to create more jobs to meet growing demand for its services.
Apple, the world’s largest company by market value, donated about $7 million for the coronavirus recovery effort in China and popstar Lady Gaga secured a $10 million pledge from Apple Chief Executive Tim Cook for her One World: Together at Home Covid-19 fundraiser event earlier in April.
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