YouTube ad revenue is decreasing because of TikTok
Bloomberg reported that Google’s parent company Alphabet saw shares fall 13% in April, blowing away $237 billion in market capitalization amid panic investors sold off shares.
Investors panic is not unfounded. Wall Street forecasts that the Internet giant will report better revenue growth this year than most other FAANG stocks like Facebook, Apple, Amazon, Netflix.
However, the drop came on Tuesday this week when it first reported first-quarter results. Accordingly, Alphabet’s revenue reached $ 68.01 billion, up 23% year-on-year. This is lower than the 34% in the first quarter of 2021 – when the economy begins to reopen after the pandemic.
The company also reported ad revenue of $54.66 billion for the quarter — up from $44.68 billion a year earlier.
Notably, YouTube’s ad revenue for the quarter fell short of analyst predictions. YouTube especially benefits during the pandemic when users have to stay at home a lot and use this service. However, the failure to achieve revenue as forecast shows that rival TikTok is going up too strongly and taking market share in the social media video segment.
Chief Financial Officer Ruth Porat said during the earnings call that YouTube is experiencing its “most modest growth” in direct response advertising. This statement partly reflects the difficulties they are facing compared to the time of Q1 2021.
CEO Sundar Pichai said that YouTube’s competitor to TikTok, YouTube Shorts, now has 30 billion daily users – which has doubled from the previous quarter and quadrupled year-over-year.
The cloud business saw a strong performance this quarter, growing 44% and beating all forecasts as more businesses turned to the service instead of their own data centers. However, the cloud computing business is losing money, seeing a loss of $931 million compared to $974 million the year before.
During the first quarter of this year, Google had to suspend almost all operations in Russia. Sales growth in the Europe region slowed to 19% in the first quarter from 33% a year ago.
Companies backed by Alphabet, including life sciences companies and self-driving car unit Waymo, nearly doubled their revenue year-over-year to $440 million from $198 million. However, the loss of this unit also increased slightly to 1.15 billion USD.
Traffic Acquisition Cost (tac), a metric used to show how much a company pays other websites to get traffic, was higher than Wall Street expectations at 11.99 billion USD.
Google’s other revenue segments, including hardware, Play Store, and non-advertising YouTube revenue, totaled $6.81 billion, slightly higher than the previous year.
Shares of Alphabet were down 18% in the year to the end of Tuesday. Hours after the earnings call, the company’s stock continued to fall to its lowest level since May 2021.
at Blogtuan.info – Source: genk.vn – Read the original article here