Amazon becomes the world’s second most valuable company following Cambridge Analytica revelations
In the wake of the Cambridge Analytica revelations, the stock market is shifting, with companies that rely on treasure troves of data taking a hit. The most obvious target is Facebook, which lost 9% of its value since the weekend, but Alphabet – parent company of Google – has also been subject to a smaller drop. And Amazon is seemingly the beneficiary, pulling ahead of Alphabet to become the second most valuable company in the world.
In an already excellent year for Amazon and its CEO, Jeff Bezos, the e-commerce tech juggernaut’s stocks rose 2.7% on Tuesday, bringing its value to a massive $768 billion (£547 billion). Alphabet’s stocks fell behind Amazon, dropping 0.4% off its value, leaving it valued at a not insignificant $762 billion (£541 billion).
Amazon’s phenomenal rise has seen it surge 85% in the last twelve months alone, with 35% coming in 2018. A lot of this can be attributed to Amazon entering new markets such as cloud computing, its popular range of Amazon Echo smart home speakers and the introduction of physical stores in the US.
Apple still pips out Amazon to hold the top spot, capping out at $889 billion (£631 billion).
It’s been a tumultuous past few days for major tech firms around the world as they try and grapple with the public and political scrutiny of the Cambridge Analytica scandal. Facebook has now lost over 9% since the start of the week.
Google, and parent company Alphabet, is another company which has its business formed firmly around user data, something that investors have seemingly identified as a problem. And while its not as big an advertiser for political advertisers as Facebook, at the 2017 snap election British political parties still spent in excess of £1 million on Google ads.
While Amazon is susceptible to the same level of scrutiny as Facebook and Google, its data collection isn’t used for the same ends.
“It is clearly companies that have proprietary personal data that they are able to market to advertisers. Those are the ones that are vulnerable,” Fred Weiss, managing director at CIBC Atlantic Trust told the Financial Times. “Not so much Amazon. It does very little on advertising and is not being impacted the same as Google and Facebook.”
Both Apple and Amazon are out of the advertising game, so to speak, so there’s very little public concern about the selloff of personal data. As the wide-reaching implications of the Cambridge Analytica investigation continues, companies that are more ambiguous with their use of data may also begin to feel the pinch.