Status: 04/27/2022 10:10 a.m
The Google mother Alphabet falls through with its quarterly figures on the stock exchange. The reason is also the development at the video subsidiary YouTube, which is being slowed down by competition from China.
The Google parent company Alphabet grew strongly again at the beginning of the year. Sales increased year-on-year by 23 percent to a good $68 billion. But analysts had expected more. The group referred, among other things, to the consequences of the Russian war in the Ukraine – economic worries had partially slowed down spending on online advertising in Europe. The steadily strengthening US dollar also meant that growth weakened compared to the previous year’s figure of plus 34 percent. Because sales outside the US were worth less when converted to US dollars due to developments on the foreign exchange market.
The video subsidiary YouTube in particular developed disappointingly. Revenue hit $6.87 billion from January through July, well below the $7.4 billion analysts were expecting. According to analysts, YouTube is increasingly feeling the competition from Chinese internet technology company ByteDance’s TikTok app, which is particularly popular with young internet users. Facebook had already reacted to the competition from China with its “Reels” offer, and YouTube with its “Shorts” offer.
Less profit
The bottom line was that profits fell from $17.9 billion in the same quarter last year to a good $16.4 billion. Among other things, Google invested heavily in the competition with Amazon and Microsoft in the cloud services business. Here sales grew by almost 44 percent to 5.8 billion dollars. The operating loss went back from 974 to 931 million dollars.
In its other businesses — the group’s so-called “other bets,” which include Waymo’s self-driving car development and health research — sales jumped from $198 million to $440 million year-over-year. The operating loss of the range remained thereby with approximately 1.15 billion dollar nearly stable.
Investors reacted disappointed to the news from California. In after-hours trading, the group’s A-share slipped almost three percent to $2,309.