Summer revenue growth at Google’s corporate parent slipped to its slowest pace as the pandemic rattled the economy more than two years ago, with advertisers barring spending and bracing for a potential slowdown.
Alphabetwhich also owns a range of smaller technology companies Googleon Tuesday posted revenue of $69.1 billion (about Rs 5.6 lakh crore) for the July-September quarter, up 6 per cent from the same period last year.
It marked the first time that Alphabet’s year-over-year quarterly revenue grew less than 10 percent since the April-June period of 2020. At that point, the advertisers who generate most of its revenue pull their reins because of economic uncertainty. in the early months of the pandemic.
Google’s ad sales weakened even more dramatically than Alphabet’s total revenue. The total advertising revenue stood at $54.5 billion (about Rs 4.47 lakh crore), a growth of just 2.5 percent from the same period last year. In another sign of more challenging times, youtubeQuarterly ad sales are down 2 percent compared to last year, marking the first time a video site’s revenue has declined since Google began disclosing its results in 2019.
The decrease in revenue also put pressure on Alphabet’s profits. The Mountain View, Calif., company earned $13.9 billion (about Rs 1.14 lakh crore), $1.06 (about Rs 90) per share, down 27 percent from the same period last year. Both revenue and earnings per share fell below estimates from analysts surveyed by FactSet.
Alphabet shares fell nearly 7 per cent in extended trading after the numbers came out. The share price has fallen by more than 30 percent this year, causing a loss of nearly $600 billion (about 50 lakh crore) in shareholders’ wealth.
“Online ad spend is obviously slower than we thought. It looks like it’s going to be a tough sledding for the next few quarters,” said David Hager, an analyst at Edwards Jones.
Alphabet CEO Sundar Pichai described the terms as “uncertain” and told analysts during a conference call, “This is a moment where you take the time to optimize the company to ensure that we are looking forward to the next decade of growth.” are ready for.”
Google’s moneymaking machine, powered by its flagship search engine, roared back last year as pandemic restrictions and government stimulus juiced the economy, helping power Alphabet to increase its revenue by 41 per cent last year, which slashed its revenue. Driven the stock price to new peaks.
But the economy has boomed in recent months as central bankers have steadily raised interest rates to counter the highest inflation rates in more than 40 years, a strategy that is threatening to plunge the economy into recession. Anyway, many households have already tightened their budgets and cut some discretionary items – a trend that has prompted advertisers to spend less marketing their products and services.
“This disappointing quarter for Google signals tough times ahead,” warns Insider Intelligence analyst Evelyn Mitchell.
Alphabet has vowed to reduce its hiring, but hasn’t shown much restraint in the summer months. After adding 17,500 employees to its payroll during the first half of the year, the company’s workforce grew by another 11,765 people in the previous quarter. Alphabet ended September with about 187,000 employees.
After Alphabet Chief Financial Officer Ruth Porat predicted during the conference call that the company would hire fewer than 6,380 employees during the last three months of this year, Pichai said a more measured approach would continue next year.
The cautionary remarks came after Pichai last month asked Alphabet employees to be “a little more responsible through one of the toughest macroeconomic conditions of the past decade” and urged them “not to equate fun with money”. Of.
Although the economy is squeezing its finances, Google is doing far better than other Internet companies whose fortunes are tied to digital advertising. Facebook suffered its first year-over-quarter decline in revenue earlier this year. Another social networking company, Snap, has been hit so hard that its share price has fallen more than 80 percent so far this year.
Facebook, crack, and many other Internet services rely on being able to track users’ whereabouts and online activities in order to target ads. Apple began blocking that tracking on iPhones 18 months ago unless users consented to monitoring. Google’s search engine is still able to collect personal information valued by advertisers through its search engine, minimizing its impact. AppleStrict privacy controls on your revenue.
Facebook’s corporate parent, meta Platforms is scheduled to report its results for the latest quarter on Wednesday afternoon.