Tech Giant Alphabet Hit by Slowing Economy

Tech Giant Alphabet Hit by Slowing Economy
Photo by Pixabay from Pexels

Alphabet, which owns Google and YouTube posted surprisingly weaker third-quarter earnings Tuesday as the search giant deals with an inflation-mired economy and easing back promotion spending. In any case, CEO Sundar Pichai defended the company’s priorities, arguing that investments in areas like YouTube Shorts eventually will pay off.

Alphabet said sales rose just 6% in the the quarter ended Sept. 30, to $69 billion, as firms cut their advertising budgets. Analysts expected the company to post revenue of $70 billion, according to Yahoo Finance. Net profit fell 27% from a year earlier.

It marked the Alphabet’s weakest quarterly growth in nearly a decade outside of the start of the pandemic.

CEO Sundar Pichai said that Alphabet was “sharpening” its concentration and “being responsive to the economic environment”.

“When Google stumbles, it’s a bad omen for digital advertising at large,” said Evelyn Mitchell, principal analyst at Insider Intelligence, noticing that Google’s main site has in the past been stronger to advertisement spending slumps than social media sites like Facebook or Snap.

“This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate.”

The strong US dollar is harming worldwide deals for US organizations as exchange rates really raise costs outside the country. Investment bank and financial services company Goldman Sachs said in a report recently that it anticipated that organizations should fault the US dollar for falling revenues.

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