Alphabet, the parent company of Google, this summer posted its weakest revenue growth since 2013, apart from the start of the pandemic, a strong sign that the digital advertising giants are becoming less resilient to inflation and competition.
The California-based group posted third-quarter revenue of $69.1 billion on Tuesday, Oct. 25, up 6 percent year-over-year. Its net profit was $14 billion, well below expectations. Its stock lost nearly 6% in electronic trading after the New York Stock Exchange closed. Between July and September, the world’s number one online advertising company saw its ad revenue grow very slightly to $54.5 billion. But ad revenue from its YouTube platform fell 2% to $7 billion, as the market expected smaller growth.
“When Google falters, it’s a bad sign for digital advertising overall”– Insider Intelligence analyst Evelyn Mitchell responded. “This disappointing quarter for Google portends tough times ahead if macroeconomic conditions continue to deteriorate.” “It’s the first time YouTube’s ad revenue has fallen since the group began disclosing them separately in late 2019, largely due to competition from streaming and short video formats. On mobile apps like TikTok, he noted:
The Internet giant is facing budget cuts from advertisers facing inflation and rising interest rates. And its results are suffering compared to 2021, when the pandemic and health restrictions greatly boosted digital activity. TikTok’s meteoric rise has also undermined the dominance of Google and Meta (Facebook, Instagram) in the global online advertising market. In 2021, this entertainment app overtook Google to become the most popular website in the world, according to Cloudflare, an internet infrastructure and services company.
“We are focused on clear priorities (…), responsible investments in the long term and an adapted response to the economic environment.”said Sundar Pichai, CEO of Mountain View, citing a press release. “The product announcements we made just last month showed that.”– he assured. “We’ve significantly improved online search and the cloud with AI, and we’ve developed new ways to monetize YouTube Shorts.”short video format copied from TikTok.
At a code professional conference in September, the manager explained that he wanted to make his company more efficient. He realized that its sheer size — nearly 187,000 employees as of Sept. 30 — slowed the decision-making process. A month ago, Google announced the closure of its Stadia online video game platform to much fanfare, three years after the launch of the service, which allows gaming without a console or PC via the cloud.
Meanwhile, the company reasserted its ambitions in the smartphone space with the launch of the Pixel 7. About 6.2 million branded phones were shipped between July 2021 and June 2022, up 129% year-on-year, according to the figures. from Canalys. But Pixels’ market share globally remains minuscule. The group’s remote computing business, Google Cloud, is also doing well; it continued to grow, with quarterly revenue of $6.9 billion, compared to $5 billion in the same period last year.
However, the core of the American company’s activity remains finely targeted advertising on a very large scale. Google recently added a new tool that will give internet users more control over the ad content that appears while browsing the web, hoping to reconcile with its billions of users at a time when ads are mixing more fluidly with original content on platforms like TikTok. : and Instagram.
Source: Le Figaro
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.