Google parent Alphabet’s underwhelming ad sales sparked concern across the digital media sector, and the company missed Wall Street’s revenue estimates for the quarter as advertisers slashed spending in the face of an economic slowdown.
The negative results on Tuesday, when Alphabet shares fell 6.5 per cent in after-hours trading, added to Wall Street’s concern that inflation will continue to hurt advertising spending. Last week, Snap’s slowest sales growth sent inflation fears through the technology sector, wiping out $40 billion in market capitalization and raising concerns for other companies in the sector, particularly the ad-dependent Meta, whose shares fell 4.5 per cent on Tuesday.
The company reported total revenue of $69.09 billion in the fiscal quarter ended September 30, up from $65.12 billion the previous year. Analysts had expected revenue of $70.58 billion on average, according to Refinitiv data.
Alphabet cited a slowdown in ad spending on YouTube, said spending on financial services at Google was cooling and announced plans to cut hiring by more than half.
“We’re working to realign resources to fuel our highest growth priorities,” said Ruth Porat, Alphabet’s chief financial officer, said in a press release.
The sources for this piece include an article in Reuters.