Tech wrap: Amazon impresses

July 26, 2011

Amazon wowed investors when it reported a 51 percent surge in sales for the second quarter and said revenue for the current quarter would beat expectations. Shares of the e-commerce giant shot up more than 6 percent on the figures in after-hours trade, even though second-quarter net profits fell as the company’s margins continued to be pressured by heavy spending on distribution, technology and digital content.

Netflix shares took another beating on Tuesday after it warned a day earlier it was expecting subscriber growth to stall in the third quarter in response to price hikes announced this month. That didn’t stop several analysts from raising their price targets on the video rental company’s stock, though, as they took the company at its word that the effects of the subscriber slowdown would be temporary. According to one analyst interviewed by Reuters, the gain in average revenue per user in the fourth quarter will “more than offset” the expected cancellations from the higher prices. Another expressed optimism about the company’s plans to expand into Latin America early next year.

Wal-Mart’s answer to Netflix, Vudu, has a new home on the website. The retailer decided to move its video streaming and rental service to its flagship site in a bid to drum up more use as it competes with a host of other similar services. Starting Tuesday, consumers can order a DVD for mail delivery or pickup or rent or buy releases digitally directly from Wal-Mart’s website. The retailer bought the video company last year but had operated it separately until now.

Facebook has taken steps to put yet another privacy controversy behind it by making it easier for users to opt-out of its facial-recognition technology for photographs. The social network began running ads on members’ home pages this month notifying them about its “tag suggestions” feature and giving them the option of disabling it completely in their account’s privacy settings. The technology – which scans photos just added to the site, compares the faces in the shots with previous pictures and then suggests name tags – came under scrutiny last month after Connecticut Attorney General George Jespen wrote a letter to the company saying the feature compromised users’ rights to privacy by analyzing faces in photographs posted on Facebook and then cataloging them.

Motorola Solutions Inc lost a bid to dismiss a class-action lawsuit accusing it of misleading shareholders about deteriorating prospects for its cellphone business, resulting in investment losses. In a decision on Monday, U.S. District Judge Amy St. Eve in Chicago said there is a “genuine dispute” as to whether predecessor company Motorola Inc in 2006 and early 2007 hid key information about its ability to compete with such rivals as Nokia Oyj and Samsung Electronics Co Ltd.

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