Alphabet starts the year with falling profits. The parent company of Google has earned 8.4% less in the first quarter of 2023, obtaining only 15,051 million dollars (13,716 million euros); a fall that would have been justified by the expenses derived from its restructuring plan, for which 12,000 people have been laid off. However, the company experienced a 2.6% increase in your billingreaching 69,787 million dollars (63,215 million euros), mainly because of its search engine and cloud business.
Sundar Pichai, CEO of Alphabet and Googlehe said in the release: “We are pleased with the performance of our business in the first quarter, with the good performance of search and momentum in the cloud. We introduced major product updates anchored in deep computing and AI. Our North Star is providing the most useful answers for our users, and we see great opportunities ahead, continuing our long history of innovation.”.
The great boost in results has been obtained from its cloud computing branch, Cloud, which has generated some operating profit of $191 million ($173 million) and invoiced 7,454 million dollars (6,754 million dollars), 28% more than the same quarter of the previous year.
Google’s advertising business falters
While the most striking, for the second consecutive semester, have been the results of the google ad business which, according to published results, has generated income of 54,548 million dollars between January and March, which represents a drop of about 110 million dollars Compared to the same period of the previous year. Although this figure is down from the 3.6% decline in Q4 2022, it’s only the third time Google has recorded a quarterly year-over-year drop in its ad revenue.
Artificial Intelligence and the appearance of competitors such as ChatGPT on Bing have been determining factors in the weakening of Google’s advertising business. Advertising is the company’s main source of revenue, so any decline in this sector could have a significant impact on its global business.
The results show that search advertising has generated 40,359 million dollars (36,572 million euros) in the first quarter of 2023, which represents a slight increase from the previous year. On the other hand, advertising on YouTube has generated 6,693 million dollars (6,065 million euros), while in the same quarters of the previous year it was 6,869 million dollars.
