Google parent Alphabet's miss fans inflation fears across digital advertising
The Hindu
Google's advertising revenue was $54.48 billion in the third quarter, compared with $53.13 billion last year but came in below analysts' expectations
Google parent Alphabet Inc.'s disappointing ad sales sparked worries across the digital media sector on Tuesday as advertisers cut back on their spending in the face of an economic slowdown.
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The negative results shattered many expectations that Google, which is the world's largest digital advertising platform by market share, would remain strong in a weakening economy and reinforced worries on Wall Street that inflation will continue to hurt advertising spending. Last week, smaller rival Snap Inc.'s slowest-ever revenue growth rate sent inflation fears through tech sector and temporarily wiped out $40 billion in market capitalisation.
Shares in Alphabet fell 5.5% in trading after the bell.
Alphabet's weak results raises concerns for other companies in the sector, especially advertising-dependent Meta Platforms. The Facebook parent, which reports results on Wednesday, saw shares drop 3.3% on Tuesday.
Google's advertising revenue was $54.48 billion in the third quarter, compared with $53.13 billion last year but came in below analysts' expectations.
"We're working to realign resources to fuel our highest growth priorities," said Ruth Porat, Alphabet's chief financial officer, in a press release.