Alphabet misses on earnings expectations, as ad revenue falls – Yahoo Finance

Google’s parent alphabet (goog, Google) Fourth Quarter Financial Results Announced Earnings and earnings per share fell short of expectations after Thursday’s bell as advertising declined year-over-year.

Here are the most important numbers from the report, compiled by Bloomberg and compared to what Wall Street expected.

Alphabet shares fell 4.2% immediately after the report.

Google’s advertising revenue fell from $61.2 billion in Q4 2021 to $59 billion in Q4 2022. Meanwhile, YouTube ad revenue fell short of analyst estimates at $7.9 vs estimate vs $8.2 billion. Meanwhile, Google Cloud lost $830 million in the fourth quarter, up from $1.7 billion in the same quarter last year.

Alphabet like meta (meta) and snap (snap), working to overcome the slowdown in the digital advertising market. Meta CFO Susan Li Q4 told analysts on the company’s recent earnings call that revenue continues to be squeezed by weak advertising demand. Meanwhile, Snap CEO Evan Spiegel said ad demand hasn’t gotten better, and hasn’t gotten significantly worse.

Microsoft also reported weakness in its advertising business, CFO Amy Hood explained in the company’s latest earnings call.

Alphabet’s first earnings since layoffs About 12,000 employees in JanuaryCEO Sundar Pichai blamed the layoffs on Alphabet’s decision to staff out to meet the company’s demands during the pandemic. But as people began to return to the real world and become less reliant on virtual options, Alphabet had to cut staff.

Ruth Porat, CFO of Alphabet, said in a statement: Significant work is underway to improve all aspects of the structure.

It’s also the first time Alphabet has reported earnings since the Department of Justice (DOJ). filed an antitrust lawsuit Opposing tech giants over their advertising business. In its complaint, DOJ says it wants to split up its advertising business, which it accuses of operating at the expense of smaller rivals and advertisers.

Alphabet CEO Sundar Pichai has announced that the company will lay off 12,000 employees in January. (AP Photo/Eric Risberg)

Needham analyst Laura Martin said in a research note that she expects the case to take seven to 10 years to resolve, and that all business decisions Alphabet makes in the interim will be handled by internal sources. It writes that it is necessary to undergo legal review.

“This means destruction of value, in addition to legal costs, regardless of the outcome,” she wrote.

However, the DOJ is not Alphabet’s only existential threat. January, Microsoft (MSFTMore) was announced. Investing billions of dollars over several years ChatGPT developer at OpenAI. Microsoft is already in talks to add its AI capabilities to various cloud products, and if it can add natural language response to its Bing search engine, it could cut into Google search’s market share.

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