Alphabet () - a parent company of Google, was one of the major benefits of the Covid-19 epidemic's economic development. Indeed, the company has taken advantage of the restriction measures that have forced millions of consumers to stay at home and communicate with the rest of the world, mostly via technology.
The problem with economies reopening and the return of workers to the workplace appears to have changed. Alphabet gave us a message in the first quarter.
Revenues have certainly increased by 22.95% to $68.01 billion in comparison to the first quarter of 2021, but they are below expectations of financial analysts, who predicted $68.05 billion. However, the rate of growth is slower than a year ago. Revenues had indeed increased by 34% in the first quarter of 2021.
Alphabet saw a net profit of $16.4 billion, down 8.33% year on year.
YouTube's slow growth
What is surprising about YouTube's performance. It increased by 4.8 percent to $6.87 billion in revenue in comparison to the first quarter of 2021. However, the profit is significantly lower than expected by analysts.
Following the conclusion of the Wall Street session, the action in electronic trading fell more than 5%.
With the epidemic, individuals had walked inside the video platform, trying to forget their daily life and brighten up their days. Moreover, these corporations immediately turned to Google, Facebook, and now TikTok to reach potential customers. The epidemic was a success for online ad platforms.
The economy's reopening alone does not explain this slowdown in growth. It appears that YouTube also suffers from TikTok, who is growing by increasing the number of advertisers.
Because advertisers are redesigning their marketing strategy in the face of inflation, rising commodity prices, fears of recession, and the shortage of many goods due to supply chains delays, it is difficult to know if the situation will improve.
The Russian war in Ukraine is now in its third month. Alphabet and other multinationals have been forced to halt their activities in Russia. It had a "outsized impact" on YouTube revenue, according to analysts during the earnings' call.
What's Next on Facebook?
YouTube has withdrawn advertising sales in Russia, particularly in Europe.
These difficulties encountered by YouTube are a reminder of what Facebook () should in turn tell investors when it comes to publishing its results on April 27. Facebook and its Facebook WhatsApp and Instagram have been banned from participating in the Russia war following Vladimir Putin's invasion of Ukraine.
Facebook apologises in January for forecasting $10 billion in losses for 2022 due to Apple device users' in-app tracking.
Following the close, Facebook's stock slid by more than 3%.
Google, Facebook, and Amazon () - together contributed 74 percent of global digital advertising expenditure last year, accounting for 47 percent of the total amount of money spent on advertising over the period, which led them on track to reach a significant share this year.
According to Insider Intelligence, Google is expected to gain 29%, or the leading share, of the $602 billion global online ad market in 2022. Facebook, now known as Meta Platforms, will be in second place with an expected 21.4% share of the global market.