Alphabet’s Revenue Falls For The First Time As Advertising Dries Up
Alphabet, which owns Google and YouTube, has recorded its first ever quarter of revenue falls, as advertisers cut down on spending during the COVID-19 crisis.
Year-on-year (y-o-y), Alphabet’s revenues declined by 2% to $38.3 billion.
Google’s advertising revenues fell by 8% y-o-y to $29.9 billion. This marks their lowest point since Q3 2018. The ‘Google Search & Other’ line of business decreased by 9.8% to $21.3 billion.
Alphabet makes the majority of its money from online advertising within Google’s search function, where people are targeted with ads relevant to their searches. This fall in advertising for Alphabet is in line with people spending less on travelling, retail and activities.
However, YouTube ads, which are less significant for the parent company, increased by 5.8% to $3.8 billion. This is reflected of people spending more time at home watching videos online.
To mitigate the losses in revenue, Alphabet also cut back on spending during the quarter, with purchases of property and equipment decreasing by 12%.
A couple of days ago Alphabet announced that it would repurchase up to $28 billion of its Class C capital stock.
At the Q2 earnings announcement, Alphabet CEO Sundar Pichai echoed a number of the comments he made at the US Congress Antitrust Subcommittee, stating that Google was good for small businesses all over the world.
“We’re working to help people, businesses and communities in these uncertain times,” said Sundar Pichai, Chief Executive Officer of Google and Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”