The tech giant fell short of revenue growth expectations – particularly for YouTube, which has seen stiff competition from TikTok.
Google’s parent company Alphabet reported weaker earnings than expected for its first quarter of the year, with a decline in net income and a slowdown in revenue growth.
The company’s revenue came in at more than $68bn for the quarter ending 31 March, which is a 23pc increase compared to the same quarter last year. However, that first quarter in 2021 had recorded growth of 34pc.
The tech giant’s net income was around $16.4bn, a decline from $17.9bn in the same period last year, while its earnings per share came in at $24.62.
The company’s revenue and earnings per share came just short of Refinitiv expectations, CNBC reported.
YouTube’s advertising revenue rose to nearly $6.87bn, up 14pc year on year. However, this growth fell short of analyst expectations of $7.5bn and may be due to growing competition from other platforms such as TikTok.
Last month, TikTok started rolling out a new feature that allows users to post videos up to 10-minutes long, to compete further with the likes of YouTube and Instagram.
YouTube hit back yesterday (26 April) with an expansion to Super Thanks, the feature that lets viewers tip creators for individual videos. The feature is now available to all eligible creators across 68 locations in the YouTube Partner Program.
While several parts of Alphabet’s business fell short of expectations in the most recent quarter, the Google Search and Cloud businesses experienced solid growth.
“Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues,” Google and Alphabet CEO Sundar Pichai said. “We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world.”
Google Cloud beat expectations with around $5.82bn in revenue, up from $4.05bn the year before. However, the cloud unit is still losing money, posting an operating loss of $931m, down from $974m the year before.
This week, Google Cloud launched Media CDN, which lets media customers deliver content using the same infrastructure that powers YouTube, including tools for ad insertion.
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