The parent company of Google is no longer at the party. Alphabet achieved its weakest revenue growth this summer since 2013, except for the start of the pandemic. This is a strong sign that the digital advertising giants are less and less resistant to inflation and competition.
The Californian group published Tuesday a turnover of 69.1 billion dollars in the third quarter, still up 6% year on year. Its net profit came out at 14 billion dollars, a result well below expectations.
A bad first for YouTube
From July to September, the world’s number one online advertising company saw its advertising revenue increase very slightly, to $54.5 billion. But advertising revenue from its YouTube platform fell 2% to $7 billion, as the market expected a small uptick. “When Google stumbles, it’s a bad sign for digital advertising in general,” responded Evelyn Mitchell, analyst at Insider Intelligence.
“This is the first time that YouTube’s ad revenue has fallen since the group began publishing them separately in late 2019, primarily due to competition from streaming and short-form video formats” on apps like TikTok, a- she also pointed out. The Internet giant is suffering budget cuts from advertisers who are facing inflation and rising interest rates. And its results suffer from the comparison with the year 2021, when health restrictions largely favored digital activities.
The meteoric rise of TikTok has also undermined the dominance of Google and Meta (Facebook, Instagram) in the global online advertising market. In 2021, this entertainment app surpassed Google as the most popular website in the world, according to Cloudflare, an internet infrastructure and services company.
The good numbers on smartphones
“We have significantly improved online search and the cloud, using artificial intelligence, and designed new ways to generate revenue from YouTube Shorts”, a short video format copied from TikTok, has for its shares recalled Sundar Pichai, the boss of Google.
The company further reaffirmed its ambitions in smartphones, with the launch of the Pixel 7. From July 2021 to June 2022, some 6.2 million handsets from the brand were delivered, an increase of 129% year-on-year, according to figures from the Canalys firm. But the market share of Pixels at the global level remains tiny. The 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. last year. But the heart of the American company’s activity remains finely targeted advertising on a very large scale.