Tech

Google Parent Alphabet Post Lower Q4 profits amid increased competition, falling ad spend


Google’s parent company, Alphabet, on Thursday posted lower profits and a slight increase in revenue for the fourth quarter of last year, as falling online ad spending and competition from rivals weighed on the giant. giant search.

While total revenue increased, advertising revenue fell by nearly 4% and revenue was at YouTube down 8% from the previous year. That seemed to spook investors, who sent the company’s shares lower in after-hours trading.

The Mountain View, California-based company said it made $13.62 billion (roughly Rs 1,11,994), or $1.05 per share (roughly Rs 90), in the quarter. from October to December. This is down 34% from $20.64 billion (approximately Rs 1,69,787 crore), or $1.53 per share (approx Rs 90), in the same period last year. .

Revenue inched 1% higher to $76.05 billion (about Rs 6,25,598) from $75.33 billion (about Rs 6,19,675).

Analysts expect Alphabet to post earnings of $1.18 per share (roughly Rs 100) on revenue of $76.2 billion (roughly Rs 6,26,849) for the period, according to FactSet Research.

Alphabet, like parent Facebook meta, Amazon and other technology companies, are navigating a difficult economic period that is particularly damaging for the online advertising market.

Last month, Alphabet announced it was cutting 12,000 jobs, or about 6% of its workforce. This is the company’s largest-ever layoff and adds to the tens of thousands of other job losses recently announced by Microsoft, Amazon, Meta and other tech companies, who are belting out forced to face the dark prospect of the industry.

In response to the layoffs, Google union workers, members of the Alphabet Workers Union-CWA, rallied outside the company’s New York City office on an earnings call. of the company.

“Alphabet is one of the most profitable companies in the world and is well-positioned to weather any economic storm. However, our executives have instead decided to lay off 12,000 of our colleagues, including many who are on medical or childcare leave, as well as many who have has more than a decade of loyal service,” the union said in a statement.

Alphabet CEO Sundar Pichai said Alphabet is facing a “challenging” economic environment and is working to redesign its cost structure to build “vibrant, sustainable businesses in terms of business growth and sustainability.” finance” across the company.

“Our long-term investments in deep computer science put us in an extremely favorable position as AI reaches its inflection point, and I am excited about the leaps and bounds of AI that we are making,” says Pichai. We’re about to announce in search and beyond.” declare.

Google is facing some artificial intelligence competition from Microsoft, which last month announced that it was making a “multi-billion dollar investment” in the artificial intelligence startup. create openAIExtremely popular manufacturer ChatGPT and other tools that can write readable text and create new images.

This technology can help by Microsoft own search engine, Bingto be in competition with Google in answering search queries with more complete answers than just links.

Pichai also advertises “great motivation” in the Cloud, YouTube subscriptions, and pixels devices, signaling to investors that Alphabet has multiple revenue streams beyond advertising to grow its business.

However, advertising still makes up the majority of Alphabet’s revenue.

In addition to economic pressure, Google is also facing regulatory pressure. Last month, the Department of Justice and eight states filed an antitrust lawsuit against Google, seeking to break Google’s alleged monopoly over the entire online advertising ecosystem as a burden that hurts. for advertisers, consumers, and even the US government.

In the complaint, the government alleges that Google is seeking to “disable or eliminate” competitors in the online advertising market through acquisitions and forcing advertisers to use their products by way of making it difficult to use a competitor’s services.

Shares of Alphabet fell about 4% in extended trading after the company’s earnings report was released.


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