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Alphabet - A glance at the figures released by Alphabet, Google and Youtube's parent company, shows that their staggering success continues: a 21% jump in quarterly revenue. And the profit ($3.5b from $26b in sales) would have been substantially larger still, had it not been for the record-breaking $2.7b anti-trust fine imposed by European regulators. No wonder Alphabet CFO Ruth Porat has signalled a willingness to challenge the EU ruling in court. Meanwhile, an increasingly assertive competition watchdog in Brussels has asked Google to cease its practice of prioritising its affiliated products and services in search results.
Clashes between foreign regulators and the golden child of Mountain View generate headlines, but as Alphabet also disclosed this week, there are larger risks on the horizon. The cost of driving traffic to Google is climbing sharply, and that in turn cuts into profits. The trend shows Google's paid traffic costs growing at a faster rate than its revenue. And this is before counting the eye-watering amount of capital Alphabet ploughs back into research and development (see: fusion reactors).
Facebook - The world's premier social network likewise had investors grinning as it posted a 71% jump in profit this quarter. The results are largely due to a 50% surge in Facebook's mobile advertising sales. The company's market cap expanded by $27b on the back of the sunny news.
Although Facebook's total user acquisition is slowing markedly, Menlo Park's decision to focus on video content, and to buy WhatsApp, are paying rich dividends. WhatsApp, and Facebook's own Messenger app, each have over one billion users and are increasingly utilised as platforms for AI development and commerce.
To top it all off, Facebook and Google currently control a whopping 49% of the total global digital advertising market. The economy of scale and the penetrating data sets that both companies brandish are clearly irresistible to marketers around the world.
Amazon - The world's largest online retailer published a different mix of results this quarter. Revenue is up 25% on last year's figures yet profit has plummeted 77% and executives warn that Amazon could lose nearly half a billion dollars in operating profit this quarter. After enjoying a lively 40% growth in share price so far this year, Amazon's stocks closed the day of the announcement down 3%. But conventional business wisdom doesn't apply to Amazon. CEO Jeff Bezos continues to run the 20-year-old retailer like a startup, plunging huge amounts of capital into expansion, rather than aiming for high profits (and high returns).
Bezos is overseeing Amazon's aggressive development in entirely new markets and fields. The purchase of US grocer Whole Foods is an ambitious gamble to reinvent the way we shop. And in India, Amazon is snapping up grocers and is hoping to augment them with its potent distribution network.
Samsung - Lastly, the South Korean tech giant has shaken off the damage of its exploding phone recall and has posted a dramatic 20% rise in sales and a 73% jump in operating profit. Despite an ongoing and widespread corruption scandal (that in part led to the impeachment of South Korea's last president) Samsung has flourished.
Having gone back to the drawing board after the Galaxy S7 battery fires, the S8 has been eagerly received by consumers. Alongside handset sales, Samsung is set to claim the title of the world's largest microchip producer this year. Intel, having dominated the semiconductor business for so long, is losing ground rapidly to a rampant Samsung division.
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Tensions are running high between Asia's two nuclear giants.
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Doklam standoff - For weeks Indian and Chinese soldiers have faced off over a small patch of land high in the Himalayas. The region of Doklam is home to a shared border between India, Bhutan and China. It's also a contested space between the three nations. When engineers from the People's Liberation Army began extending and reinforcing a road into Bhutanese territory, India intervened on behalf of the small kingdom. Beijing has feigned ignorance, claiming the area as its own, though experts believe this to be a meaningful incursion. Both sides have bristled at one another, bolstering their military presence in the area and conducting chest-thumping live fire exercises close by.
It's the most serious escalation of border conflict between India and China since 1962, when the two nations fought a short and bloody war over territory near Jammu and Kashmir. That India resoundingly lost that war adds a complex layer of history to India's recent rejection of China's One Belt One Road policy. This week India's defence minister meets his Chinese counterparts to calm the situation. It's probable that minor border disputes will persist, yet fall short of outright violence, as Delhi and Beijing experience the growing pains that neighbouring regional powers are destined to do.
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The Taliban are winning back territory all across the country.
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Bloody Kandahar assault - The Afghan National Army suffered a humiliating blow this week when Taliban fighters overran an outpost in Kakhrez, just a short drive from Kandahar city. Militants overwhelmed the perimeter defences late at night and gunned down at least 30 soldiers before being subdued. Locals described the attack (just one of three that night) as a slaughter. Weapons and vehicles were also stolen. This brazen assault was just one of many in recent weeks as the Taliban pushes back towards its one-time capital.
It has been a shocking year for Afghanistan's central government. Nearly half of the country's districts are under Taliban rule and security forces are suffering grievously. Since the drawdown of US troops in the country the Taliban have seized the opportunity: in the last year an astonishing 6,800 policemen and soldiers have been killed. Despite numbering 300,000, the military has been unable to contain threats from the Taliban or ISIS. Even though the Pentagon is planning to reinforce its garrisons in Afghanistan, it is doubtful that the war will be turned in any meaningful direction.
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Trump gave another bizarre speech; this time to children.
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- The Senate passed a Russia sanctions bill 98-2.
- But if Trump signs it, the EU will fight it.
- John McCain made a thundering return from surgery.
- The GOP's last resort 'skinny' repeal bill failed.
- Trump attacked transgender soldiers.
- He gave a politicised speech to Boy Scouts.
- Jared Kushner denied any collusion.
- Trump repeatedly criticised Jeff Sessions.
- Anthony Scaramucci blamed Priebus, Bannon.
- Trump welcomed a planned $14b Foxconn factory.
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Good cow.
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Bovine breakthrough - The global fight against HIV has found a strange new ally: the humble cow. Roughly 1 in 10 people suffering from HIV produce a potent antibody that allows their body to overcome the virus, but its a slow process. Researchers have now found that cows produce a remarkable amount of the same antibodies in a matter of weeks. It might be time to thank the mighty cow for more than milk, steak and leather.
What's that Lassie? A futurologist has sent shockwaves through the pet lovers community (which we assume is everyone) by claiming a dog-translator will exist within a decade. Given the in-depth work done by animal and behavioural specialists in the field, its possible that AI-powered language tools will one day translate what your pet wants!
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Spraying Sri Lankan villages.
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Dengue outbreak - Sri Lanka is reeling from the worst flare-up of Dengue fever cases in years. 100,000 people have been infected this year and 300 have died, stretching hospital resources. Monsoonal flooding across South Asia has created perfect conditions for mosquitoes to breed.
Boko Haram strike - Islamic militants have attacked and killed as many as 50 people on an oil-exploration site in northern Nigeria. The area surrounding the Lake Chad basin is blessed with bountiful natural resources but cursed with endemic violence and upheaval. Africa's most populous nation is struggling to cope with insurgencies within its borders.
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Your weekend long read... This is one for our premium subscribers. It's a stunning piece from Foreign Policy that details what life was like under ISIS in Mosul. It follows one Iraqi family struggling to survive under a brutal regime, then trying to put their lives back together in a city shattered by war.
Remember, you too can read all of inkl's premium content for just 10c per article. To support great newsrooms, just head to inkl.com to subscribe.
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