Alphabet’s Growth Slows, But Google Search Demonstrates Resilience
Alphabet Slows, But Search Shows Resilience
Alphabet reported fiscal first-quarter 2023 revenue of $69.8 billion, compared with $68.9 billion a year ago.
Net earnings fell to $15.05 billion, compared with $16.44 billion in the year-ago quarter. It is the company’s fifth consecutive decline in earnings.
Revenue from the Search and Other category rose 1.87% in the quarter to $40.4 billion, compared with a year ago — up from about $39.6 billion.
The uptick demonstrated the resilience of search.
Google’s search business continues to suffer from competition as Microsoft makes a major push into the advertising space supported by artificial intelligence and ChatGPT-4 from OpenAI. Google still calls Bard, its AI technology, an experiment.
“Google’s ad business is under threat,” said Insider Intelligence senior analyst Max Willens. “YouTube revenues declining again, and Search and Other revenues rising less than 2% reflect the reality that Google’s core business is facing the most serious challenges it has encountered in quite some time.”
In 2023, Google will remain dominant in worldwide search ad revenue with $140.97 billion. That equates to 57.4% of the global search ad market, according to Insider Intelligence data.
Google’s worldwide display business will grow to $29.90 billion, giving it a 9.0% share of global display spending.
Worldwide, the analyst firm expects Google to generate $180.59 billion in net digital ad revenue in 2023 — up 7.2% compared with last year. This gives Google a 28.4% share of the worldwide digital ad market. Meta comes in second with a 20.1 % share.
Advertising sales at Google’s video platform YouTube fell nearly 3% to $6.7 billion in the first quarter.
Sales at Google Cloud — the division that offers software and technology services to other businesses — jumped 28% to $7.5 billion, marking the first time that the division recorded a profit — $191 million.
In January, Google cut more than 12,000 jobs — 6% of its global workforce. A leaked internal memo in March followed, revealing that Alphabet would cut back on some employee benefits to save money.