Airbnb Posts Huge Loss, Yet Exceeds Expectations In First Earnings

Airbnb, the short-term property rental platform, showed an eye-popping loss of US$3.89 billion (~RM15.75 billion) in its first earnings report since its IPO (Initial public offering) last December, CNBC reported. But the company also performed ahead of market expectations and its competitors.

Aside from its recent IPO, Airbnb is also closely watched as a potential barometer for a travel industry badly ravaged by COVID-19. During the last quarter (Q4 2020), the company took in revenue totalling US$859 million (~RM3.48 billion) – notably more than the US$747.4 million (~RM3.03 billion) that were expected by analysts, Reuters reported.

More importantly, Airbnb didn’t do as badly as its competitors, seeing a year-on-year revenue drop of just 22%. In contrast, rival Expedia saw a whopping drop of 67% while Booking Holdings similarly posted a 63% fall.

Indeed, Airbnb’s letter to shareholders emphasised the company’s “resilience” despite the pandemic and lockdowns across the globe. The firm also attributed a large chunk (US$2.8 billion / ~11.34 billion) of its reported loss to stock-based compensation costs.

But despite all its (relatively) rosy talk, the company is still tightening its belt and won’t be spending as much on marketing. “What the pandemic showed is that we can take marketing down to zero and still have 95% of the same traffic as the year before,” Airbnb CEO Brian Chesky told CNBC’s Jim Cramer.

Italy’s Central Bank Experiments With Using Twitter To Track Inflation Expectations

In the future, your tweets could help determine what your country’s central bank does. According to Reuters, the Bank of Italy – the country’s central bank – recently experimented with using Twitter to track people’s expectations of whether prices would rise or fall. And to no surprise of long-time social media veterans, it turned out to be pretty accurate.

What bank researchers did was collect and sift through a whole bunch of tweets from a certain time period (June 2013 to December 2019), looking for pre-selected words related to inflation, prices, and price dynamics. Examples of these words might be “bargain price” (meaning, prices are falling) or “very high price” (meaning, prices are rising).

“[T]he fact that [economic] agents talk about expensive bills should reflect expectations of higher inflation. On the other hand, people discussing declining oil prices should correspond to expectations of lower inflation,” bank researchers said in a report on the experiment.

So, to get an overall feel about how consumers feel about prices, researchers simply measured the difference between the amount of tweets indicating rising prices and the amount of tweets indicating falling prices. Simple, right? Researchers are also banking on the notion that when more people talk about something, that view or belief tends to spread.

In the end, researchers found that their tweet-based indicators matched inflation figures and price expectation data produced by Italy’s national statistics office, financial markets, and other forecasters. Tweet-based indicators were just as accurate, but also provided more precise detail and in real-time too.

The researchers, of course, said that more study is necessary, but it’s still a very cool development. Remember that a good chunk of economic statistics are gathered through surveys, and what is social media but one long, unending survey?

Google Parent Company Alphabet Beats Revenue Expectations Thanks to Ad Sales

Google’s parent company Alphabet reported quarterly revenue of USD$56.9 billion (~RM230.3 billion), up 23% year-on-year and beating market expectations, on the back of strong ad sales. Analysts had instead forecast quarterly revenue of USD$53.13 billion (~RM215.12 billion), reported CNBC citing Refinitiv.

“Google’s products and support have been a lifeline for millions of small medium businesses hit hard by the pandemic,” said Alphabet CEO Sundar Pichai on a conference call with analysts, according to Reuters. Google has predictably benefited from lockdowns across the globe that have pushed businesses online and towards Internet advertising.

Google and Alphabet CFO Ruth Porat said as much when she noted that the tech giant’s stellar performance “was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year.”

YouTube ads alone brought in USD$6.89 billion (~RM27.9 billion), up by 46% year-on-year. CNBC report stated that analysts were expecting USD$6.11 billion (~RM24.74 billion), according to StreetAccount.

“We now reach more 18-49 year olds than all linear TV networks combined,” remarked Google chief business officer Philipp Schindler, CNBC reported.

Still, it wasn’t all good news. Google’s cloud division reported an operating loss of US$1.24 billion (~RM5.02 billion). Bloomberg noted that Alphabet CEO Pichai has been looking into cloud services to diversify away from Google’s main search and advertising business. However, the tech giant still lags behind Amazon and Microsoft when it comes to the cloud market.