While overall revenue grew, advertising revenue fell by
nearly 4 percent and revenue at YouTube declined 8 percent year-over-year. That
appeared to spook investors, who sent the company's stock lower in after-hours
trading.
The company based in Mountain View, California, said it
earned $13.62 billion or $1.05 per share, in the October-December quarter.
That's down 34 percent from $20.64 billion, or $1.53 per share, in the same
period a year earlier.
Revenue inched 1 percent higher to $76.05 billion from
$75.33 billion.
Analysts expected Alphabet to post earnings of $1.18 per
share on revenue of $76.2 billion for
period, according to FactSet Research.
Alphabet, like Facebook parent Meta, Amazon and other tech
companies, is navigating a rough economic patch that's especially hurting the
online advertising market.
Last month, Alphabet announced it was cutting 12,000 jobs,
or about 6 percent of its workforce. It was the company's biggest-yet round of
layoffs and adds to tens of thousands of other job losses recently announced by
Microsoft, Amazon, Meta and other tech companies that are tightening their
belts in the face of a darkening outlook for the industry.
In response to the layoffs, Google's unionised workers,
members of the Alphabet Workers Union-CWA rallied outside of the company's New
York City office during the company's earnings call.
“Alphabet is one of the most profitable companies in the
world, and well positioned to weather any economic storm. Yet instead our
executives decided to layoff 12,000 of our coworkers, including many on medical
or parental leave, as well as many with over a decade of loyal service,” the
union said in a statement.
Alphabet is contending with a “challenging” economic climate
and is working to re-engineer its cost structure to build “financially
sustainable, vibrant growing businesses” across the company, 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," Pichai
said in a statement.
Google is facing some competition in artificial intelligence
from Microsoft, which last month announced it is making a “multiyear,
multibillion dollar investment” in the artificial intelligence startup OpenAI,
the maker of the wildly popular ChatGPT and other tools that can write readable
text and generate new images.
The technology could help Microsoft's own search engine,
Bing, compete with Google in answering search queries with more complete
answers instead of just links.
Pichai also touted “great momentum" in Cloud, YouTube
subscriptions, and Pixel devices, signalling to investors that Alphabet has
plenty revenue sources outside of advertising to grow its business.
Nonetheless, advertising still makes up the bulk of
Alphabet's revenue.
Beyond the economic squeeze, Google is also facing
regulatory pressure. Last month, the Justice Department and eight states filed
an antitrust suit against Google, seeking to shatter its alleged monopoly on
the entire ecosystem of online advertising as a hurtful burden to advertisers,
consumers and even the US government.
The government alleged in the complaint that Google is
looking to “neutralize or eliminate” rivals in the online ad marketplace
through acquisitions and to force advertisers to use its products by making it
difficult to use competitors' offerings.
Shares in Alphabet fell about 4 percent in extended trading
after the company's earnings report came out.
0 comments:
Post a Comment