Web giants report revenue increases

22 Oct 2004

Internet giants Amazon and Google both reported significant revenue increases in the past quarter. Search giant Google revealed in its first public earnings report that revenues more than doubled over the year to US$805.9m and web retail player Amazon.com reported revenues of US$1.4bn. However, a less than bullish outlook has resulted in Amazon’s stock falling 8pc since last night.

Google, which only floated in recent months, revealed its first public financial results last night. Revenue jumped 105pc to US$805.9m from US$393.9m a year earlier. Google said before the debut of its stock that it would not issue financial forecasts, and it said so again last night.

Google and rival Yahoo each get a significant portion of their revenue from web search advertisements, a lucrative market that has been quickly adopted by people looking to sell goods or find business leads online. The company employs some 150 people in Dublin selling the concept to Europe.

Meanwhile, web retail player Amazon.com reported that revenue rose to US$1.46bn from US$1.13bn, driven by a 52pc increase in international sales and strong growth in its electronics and other merchandise segment.

The company’s quarterly profit met the average analyst forecast but its outlook for 2005 implied a forecast for a drop in sales growth from near 30pc in 2004 to a range of between 6pc and 22pc in 2005, prompting its stock to decline 8pc in overnight trading.

In recent months, siliconrepublic.com reported that Ireland is competing against Luxembourg for a lucrative 250-job project in which Amazon is planning to locate its European business operations. Amazon has been looking at opportunities to establish a customer support and technical centre in either Dublin or Cork or both and has been weighing up a number of options in terms of data centres and office facilities.

However, Dublin boasts the main concentration of internet data centres in Ireland. Siliconrepublic.com learned that at least five internet data centre providers in Dublin have been asked to furnish the internet giant with written proposals.

According to sources, Amazon is in two minds about its overall decision, which will be weighted by matters of Vat and technical excellence.

Luxembourg has the lowest Vat rate in the European Union at 11pc, and choosing that country would mean that because EU Vat on online sales applies to the source of the product Amazon would be able to sell books, CDs and DVDs at lower rates.

However, because of Ireland’s perceived technology prowess and the fact that Dublin has one of the largest concentrations of data centres in Europe, Amazon.com would be basing its decision on technical excellence and security of online purchases.

By John Kennedy