The collapse of Snap sounded the alarm of the digital advertising industry, and the market capitalization of Google, Facebook and other companies collectively lost 290 billion.

Shares of Snap, the parent company of instant Snapchat, plummeted on Thursday, triggering a chain reaction that dragged down the shares of other companies that rely on digital advertising, such as Google and Facebook.

The outlook for digital advertising platforms is not good. Snap's third-quarter revenue was $1.13 billion, up 6 per cent from a year earlier and slightly below analysts' expectations of $1.14 billion, while shares tumbled 25 per cent in after-hours trading, down 90 per cent from their September peak. Snap says inflation has led some advertisers to cut their marketing budgets. The company also warned that its revenue would not grow during the normally busy holiday season.

Since Snap is the first major social media company to report third-quarter results, its performance is likely to be a bellwether. After Snap's share price plummeted, the shares of other companies that sell Internet advertising also fell, with Facebook parent MetaMeta down about 4% and Google parent Alphabet down 2%. Together, the shares of these companies and other Internet advertising companies such as Spotify and Roku lost more than $40 billion (288.7 billion yuan) in after-hours trading.