With the current layoffs and a lawsuit plaguing them, YouTube and Google ad revenue took a plunge. Google reported advertising revenues of US$59.04 billion, a decline from US$61.24 billion in the same quarter a year earlier. YouTube, on the other hand, had a roughly 8% decline in revenues, bringing in US$7.96 billion.
The results come as Google confronts threats from the US Department of Justice as well as from the slowing economy and IT job losses. Google Network’s revenue decreased from $9.3 billion to $8.4 billion, while Google Search’s fell from $43.3 billion to $42.6 billion. Google and Alphabet CEO Sundar Pichai said:
“Our long-term investments in deep computer science make us extremely well-positioned as AI reaches an inflection point, and I’m excited by the AI-driven leaps we’re about to unveil in Search and beyond.”
YouTube and Google ad revenue drops off compared to the last quarter
The firm sees significant momentum in the cloud, YouTube subscriptions, and Pixel smartphones, he continued. Pichai added, “We’re on an important journey to re-engineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet.”
The business also disclosed a decrease in its personnel of roughly 12,000 posts earlier in the month. According to the financial statement, “We expect to incur employee severance and related charges of US$1.9 billion to US$2.3 billion, the majority of which will be recognised in the first quarter of 2023.” Alphabet is also making efforts to maximize the use of its international office space.
Similar to his recent remarks, Pichai expressed his trust in AI at the time of the exodus and called it a “huge opportunity” for the business despite the loss of 12,000 jobs. Pichai said the firm is currently in a strong position because of the power of the company’s goal, the worth of Google’s goods and services, and its early investments in AI.
According to Pichai, Google’s products are better than ever as a result of those early investments. “Pivoting the company to be AI-first years ago led to groundbreaking advances across our businesses and the whole industry,” he said. “We’re getting ready to share some entirely new experiences for users, developers and businesses, too. We have a substantial opportunity in front of us with AI across our products and are prepared to approach it boldly and responsibly,” he continued.
The US Justice Department recently sued Google for antitrust violations for the second time in just over two years. This time, it concentrated on Google’s online advertising industry by asserting that the company is utilizing anticompetitive practices to preserve a monopoly on digital advertisements. According to the lawsuit, Google intimidates advertisers into choosing its ad technology over that of rival companies by buying up the competitors. In a press release announcing the complaint, the US Department of Justice stated:
“Over the past 15 years, Google has engaged in a course of anticompetitive and exclusionary conduct that consisted of neutralising or eliminating ad tech competitors through acquisitions; wielding its dominance across digital advertising markets to force more publishers and advertisers to use its products; and thwarting the ability to use competing products. In doing so, Google cemented its dominance in tools relied on by website publishers and online advertisers, as well as the digital advertising exchange that runs ad auctions.”
New platforms like OpenAI’s ChatGPT, a chatbot, could pose a challenge to Google’s search business, which generates the majority of its advertising revenue. Executives from Google this week discussed developments in artificial intelligence to power its ad platforms and enhance marketer performance during an earnings call with analysts.
A drop in revenue for YouTube may also be attributed to Apple’s privacy practices, which have made it difficult to run advertisements on iPhones and other devices. Apple has gradually made it more difficult for apps to monitor users online, which limits its access to marketing and targeting data.
We hope that you enjoyed this article on the drop in YouTube and Google ad revenue. If you did, we are sure that you will also enjoy reading some of our other articles, such as Tim Cook reveals during Apple earnings call that there will be no layoffs, or Google MusicLM AI: Turn text to… music!
