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Alphabet presents disappointing results because of YouTube

While Alphabet, the parent company of Google, had posted excellent performance in 2021, it is starting the year with rather disappointing financial results for the first quarter. Indeed, growth is slowing compared to that posted the previous year, in particular for the YouTube video platform.

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As the Financial Times reports, Alphabet’s profits fell $1.5 billion in the first quarter of 2022. Its shares fell more than 5% in after-hours trading as the group announced a 23% increase in revenue to $68 billion (just below the $68.1 billion forecast). In fact, a year ago, Alphabet’s revenue had increased by 34%.

According to Sundar Pichai, cloud and Google Search results were high. “We will continue to invest in quality products and services and create opportunities for our partners and local communities around the world”said the CEO of Alphabet and Google.

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In contrast, YouTube “experiences a slight headwind to revenue growth”, in the words of Ruth Porat, chief financial officer of Alphabet. The platform’s quarterly revenue was $6.9 billion, while analysts expected revenue of $7.5 billion.

Google welcomes the fact that despite people returning to normal life, they are still spending more time on YouTube, which now has more than 2 billion active users per month. However, compared to other Google businesses, the video platform was more affected by the war in Ukraine. Google has suspended its activities in Russia, and advertisers have reportedly suspended their advertisements.

Shorts, Pixel 6 and Pixel 6a

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Google had a lot of good news to announce. First of all, the TikTok competitor launched by YouTube, called Shorts, is experiencing very strong growth. Shorts’ viewership reportedly grew fourfold last year and now the feature has 30 billion views per day.

While the competition with TikTok is tough, Shorts helps YouTube retain its audience by offering a similar feature. But for now, YouTube is still looking for the right business model to monetize this new platform. In the meantime, the Mountain View firm has decided to take out its checkbook in order to pay the best creators of YouTube Shorts.

As far as hardware is concerned, Google evokes a great success for its Pixel 6 series.

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“Pixel 6 is a huge step forward for the Pixel wallet. And it was great to see the response from Pixel users. It’s the best-selling Pixel of all time. And we are developing broad brand awareness among consumers and making good progress. I’m excited about the products we’ll be releasing and can’t wait to share more on Google I/O”said Sundar Pichai, according to the site 9to5Google.

As a reminder, the Google I/O 2022 conference is scheduled for May 11 and 12. And Sundar Pichai’s statement suggests that Google may show off the Pixel 6a at this event.

The Pixel 6a will be the affordable version of the Pixel 6. But the mid-range model is rumored to use the same Google Tensor chip (and therefore have the same performance) as the Pixel 6.

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