Google fell short of expectations as YouTube ad revenue dwindled
Google Parent Alphabet (GOOG, GOOGLE) announced its third quarter earnings on Tuesday, which fell short of analysts’ expectations on the top and bottom lines, as YouTube advertising revenue came in $400 million short of estimates.
These are the highlights from the report compared to what Wall Street expected from the company, as compiled by Bloomberg.
Alphabet shares fell nearly 6% after the announcement.
The digital advertising market has been hit by a slowdown in spending over the past few quarters as companies tighten their budgets in the face of rising inflation and interest rates.
Social media companies were particularly hit by the cuts, with Snap reporting a net loss of $360 million and revenue growth of just 6%, its lowest ever. Meta’s Facebook encountered similar problems, with the company reporting its first year-over-year revenue decline in Q2. That company is scheduled to report its third-quarter earnings on October 26.
But Snap and Meta also face fallout from Apple’s iOS privacy changes, which limit their ability to collect user data over the web that they then use to sell ads. Alphabet, however, is still able to collect a wealth of user data through its search app and YouTube, giving advertisers a safe haven from Apple’s privacy changes.
Alphabet is still not immune to the impact of the economic slowdown. According to Bloombergthe search giant halted projects at its Area 120 incubator and required workers in the group to reapply for jobs elsewhere in the company.
And according to CNBCCEO Sundar Pichai was forced to address concerns from employees who accused the firm of cutting costs when Alphabet was making record profits.
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