Business

Big Tech could emerge from virus crisis even stronger

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OAKLAND (CALIFORNIA) • While the rest of the economy is tanking under the crippling effects of the coronavirus, business at the biggest technology companies is holding steady – even thriving.

Amazon said it was hiring 100,000 warehouse workers to meet surging demand.

Mr Mark Zuckerberg, Facebook's chief executive, said traffic for video calling and messaging had exploded.

Microsoft said the numbers using its software for online collaboration had climbed nearly 40 per cent in a week.

With people told to work from home and stay away from others, the pandemic has deepened reliance on services from the technology industry's biggest companies, while accelerating trends that were already benefiting them.

Amazon has been muscling in on bricks-and-mortar retailers for years, but shoppers now reluctant to go to stores are turning to the e-commerce giant for a wider variety of goods, such as groceries and over-the-counter medication.

Streaming services like Netflix have dampened box-office sales for movies in recent years. Now, as movie theatres close under government orders, Netflix and YouTube are gaining a new audience.

Downloads of Netflix's app – a proxy for traffic from the streaming site – jumped 66 per cent in Italy, according to Sensor Tower, an app data company. In Spain, they rose 35 per cent. In the United States, where Netflix was already popular, there was a 9 per cent bump.

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Companies were already dumping their own data centres to rent computing from Amazon, Microsoft and Google. That shift is likely to speed up as millions of employees are forced to work from home, putting a strain on corporate technology infrastructures.

Even Apple, which once appeared to be among the US companies most at risk from the coronavirus because of its dependence on Chinese factories and consumers, appears to be on a good footing. Many of the company's factories are nearly back to normal, people are spending more time and money on its digital services, and last Wednesday it even released new gadgets.

"The largest tech companies could emerge on the other side of this much stronger," said Mr Daniel Ives, managing director of equity research at Wedbush Securities.

That is not to say they should not be worried.

Advertising, the lifeblood of Google and Facebook, tends to suffer during economic downturns.

The stocks of Apple, Microsoft, Amazon, Facebook and Google's parent company, Alphabet, have collectively lost more than US$1 trillion (S$1.45 trRead More – Source