by Staff Writers
New York City (AFP) July 25, 2013
Amazon surprised analysts Thursday with a $7 million quarterly loss but said revenues jumped 22 percent from a year ago to $15.7 billion.
The online retail giant, which has been aggressively expanding its footprint and digital content offerings while promoting its Kindle line of tablets, had been expected to post a modest profit for the second quarter.
"We're so grateful to our customers for their response to Kindle devices and our digital ecosystem," said Jeff Bezos, founder and chief executive.
"This past quarter, our top 10 selling items worldwide were all digital products -- Kindles, Kindle Fire HDs, accessories and digital content," he said.
"The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won't find anywhere else. Prime Instant Video has surpassed 40,000 titles."
Amazon has slashed prices of its Kindle HD tablets to as low as $169 in the US and 139 pounds in Britain, amid an intense price war in the tablet market.
The loss translated to two cents a share, while analysts had been expecting a profit of five cents per share.
Amazon stock dropped 0.3 percent to $302.50 in after-hours trading.
Amazon, which upgraded and expanded its Kindle line last year, has been adding more content like films, TV shows and music to its offerings as part of its effort to keep pace with rivals like Apple and Google.
It recently announced a deal with Viacom to bring hundreds of TV shows to Amazon video, including Dora the Explorer and SpongeBob SquarePants, and is producing more of its original television shows.
The Amazon Appstore has been expanded to nearly 200 countries and customers can now use Amazon Coins to purchase apps, games and other items.
Zynga woes deepen as it loses money and players
Zynga said that it lost $15.8 million on revenue that shrank 38 percent from a year earlier to $230.7 million.
Meanwhile, the number of people playing Zynga games daily plunged 45 percent from last year to 39 million, according to the company.
The number of monthly active users was down 39 percent to 187 million in a year-over-year comparison.
Zynga shares plunged about 14 percent to $3 in after-hours trading that followed release of the quarterly earnings figures.
San Francisco-based Zynga last month announced that it is cutting nearly a fifth of its staff, or 520 jobs, as it refocuses on games for mobile devices.
Zynga founder Mark Pincus said the cuts were need for the company to "move forward."
Zynga has been pulling the plug on unpopular games and investing in titles for play on smartphones or tablets, as well as its own online arena at zynga.com.
Zynga rose to stardom by tailoring games for play by friends on Facebook. But the two firms have grown apart in the past year as Facebook develops new revenue streams and Zynga seeks new consumers.
The San Francisco-based company has made moves into real-money gaming with the potential to generate windfalls from popular titles such as Zynga Poker.
"Zynga believes its biggest opportunity is to focus on free to play social games," the company said in the earnings release.
"While the Company continues to evaluate its real-money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States."
Pincus early this month recruited Microsoft entertainment division chief Don Mattrick to take over as top dog at Zynga.
"The next few years will be a time of phenomenal growth in our space and Zynga has incredible assets to take advantage of the market opportunity," Mattrick said in the earnings release.
"We have a lot of hard work in front of us and as we reset, we expect to see more volatility in our business than we would like over the next two to four quarters."
Zynga hit the stock market with a billion-dollar listing in December of 2011 by offering 100 million shares -- one seventh of the company's total -- at $10 a pop.
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