The news: Google missed expectations on nearly all fronts in the fourth quarter, signaling the start of a difficult chapter for the internet giant whose dominance has defined the digital advertising and media landscape.
On the bright side: Google was quick to highlight sectors with promising prospects for future growth.
The ad giant trembles: Google’s rough Q4 earnings report follows the company’s historic layoff of 12,000 employees in an attempt to slim down as interest rates rise, legal challenges pile up, and a possible recession looms. In its earnings call, Alphabet CFO Ruth Porat said the company will be “slowing the speed of hiring significantly.”
Analyst take: When it comes to a company as big as Google, poor results will have a ripple effect across its entire sector. “Google closed the year in a very different place than it was at this time last year,” said Insider Intelligence analyst Evelyn Mitchell. “Even search revenues, which are performance-driven and typically insulated from ad spending downturns, also declined. These results do not bode well for the rest of the digital advertising industry.”
What’s next for Google? Google’s advertising empire is showing cracks that have already emboldened smaller competitors to grab at slices of its enormous market share. Even if there isn’t much growth in the cards for Google in 2023, It will remain the largest force in advertising.
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