Alphabet, Google’s parent company, posted a profit of $16.4 billion in the first quarter, 8% less than a year ago, in a sign of a return to normal after the boom of the pandemic.
At $68 billion, its sales jumped 23% in one year, but it’s also just below analysts’ expectations.
The California group suffers from a comparison with 2021, when advertisers invested heavily in online advertising for consumers to see on their screens, unable to get out as before.
Despite resuming in-person activities, Sundar Pichai, President of Alphabet, emphasized during the conference call with analysts, “Time spent on YouTube continues to increase.”
But the platform was disappointed by weak growth over the course of one year. Advertising on the video platform made “only” $6.9 billion in the first quarter, not much more than $6 billion last year.
Between inflation and difficulties in the global supply chain, advertisers must “manage budgets carefully,” Paul Verna, an analyst at eMarketer, points out to AFP.
He adds that the hugely popular TikTok platform “now poses a significant threat” in the primary market for mobile video consumption.
He added that both factors “do not bode well for online advertising in general and YouTube in particular.”
– “Hangover” –
YouTube took a stand in the TikTok area in March 2021 by launching YouTube Shorts, a very short (under 60 seconds) format. These videos now generate “over 30 billion daily views, four times more than last year,” Sundar Pichai welcomed.
He said his engineers “will, as always, focus first on creating a great user experience before working on monetization.”
However, a potential “post-pandemic hangover” should not be ruled out, as Paul Verna emphasizes.
He explained that the big tech companies “did not celebrate, but the health crisis has boosted their business significantly.” “This kind of growth cannot continue. If you take this aspect into account, the results are not at all catastrophic, Google remains a leader in search and very strong in video.”
Ruth Porat said the comparison would be “harder” for the current quarter, a period also affected by the shutdown of its business activities in Russia, linked to the war in Ukraine.
The California group lost about 5% during electronic trading after the New York Stock Exchange closed.
Alphabet has also hired it retaliatory – the company now has nearly 164,000 employees worldwide, up from 140,000 a year ago, and has invested in research and development.
In early March, the company announced its intention to buy cybersecurity company Mandiant for about $5.4 billion, to boost its cloud (remote computing) offering.
Google Cloud saw its revenue rise 44% to $5.8 billion in the first quarter.
– Fewer cookies –
Google also announced on Tuesday that it is adding information to apps available on its download platform, the Play Store, so users are better aware of what data is being collected on them.
The Android operating system, which is owned by Google, interacts with the vast majority of mobile phones around the world.
“Users want to know what the collected data is used for and whether the app publisher is sharing it with third parties,” Susan Fry, vice president of the group responsible for Android privacy, said in a statement.
Google, which was sentenced in January to a heavy fine by a French personal data regulator, has since last week allowed its European users to refuse to deposit “cookies” with a single click.
These computer files track their online browsing, so third parties can then target them with personalized ads.
Google pledged in January to change its practices, after it was sentenced by Cnil, the French personal data policeman, to pay a fine of 150 million euros and make changes within 3 months.
Facebook has also been fined 60 million euros and is now offering a button to allow “essential cookies only”.