Google parent Alphabet’s revenue grew much less in the third quarter than in previous periods, as advertisers have become more cautious with their spending due to a poor economic outlook.
As a result, profit fell by more than a quarter compared to last year’s period.
Total revenue from the company behind Google and YouTube rose 6 percent year-over-year to $69.1 billion. A year ago, revenues shot up by about 40 percent. However, net profit fell to $13.9 billion from $18.9 billion in the third quarter of 2021.
Google gets the majority of its revenue from advertising. Because of an impending recession, the outlook for that market is unfavourable, as companies are often the first to cut marketing spending in the event of a downturn. Alphabet CEO Sundar Pichai is already cutting costs this year by recruiting fewer new staff.
In a brief explanation of the quarterly figures, he now says that Alphabet is ‘focusing more sharply’ on a limited number of priorities. This concerns the expansion of the cloud software division, which is overgrowing but is still loss-making. The company is also looking for ways to make more money with shorter videos on YouTube.
The much smaller tech company Snap, of the app Snapchat, already published disappointing growth figures last week due to the problematic advertising market. Alphabet is the first big name among American tech companies that depend on advertisers who comes up with numbers. For example, Facebook owners Meta and Twitter also depend on advertisers.