Google executives: "Cryptocurrency Winter" hits the company's search advertising business hard
On Tuesday, Oct. 26, during Alphabet's third-quarter earnings call in the United States, Google's chief business officer, Philip Schindler, blamed part of the slowdown in revenue growth on reduced advertising spending by cryptocurrency and other financial companies. It seems that even Google is not immune to the influence of the "cryptocurrency winter".
"in the third quarter, we did see a decline in search spending by some advertisers in some areas," Schindler said. in financial services, for example, we have seen a decline in search spending in areas such as insurance, loans, mortgages and cryptocurrencies. "
Google's overall advertising revenue grew by 6% in the third quarter, excluding the first quarter of 2020, when the COVID-19 epidemic began, the lowest level of growth since 2013. Among them, YouTube advertising revenue fell rather than increased, shrinking by 2 per cent compared with the same period last year. Sandal Sundar Pichai, chief executive of Google and its parent company Alphabet, said the "challenging macro environment" was having a negative impact on Google's advertising business.
Schindler mentioned cryptocurrency twice, but he didn't provide any additional data or details. The cryptocurrency industry was hit hard in 2022 as investors scrambled to flee these risky assets, selling digital currencies and related stocks they had inflated in previous years.
The value of both Bitcoin and Ethernet Square has shrunk by nearly 60 per cent this year. Shares in Coinbase, the cryptocurrency exchange listed in 2021, are down more than 70 per cent. At the same time, the secret currency industry has been plagued by bankruptcy as the liquidity of hedge funds and lending institutions dries up and, in some cases, is forced to default. Celsius Network, Voyager Digital and Three Arrow Capital are all well-known companies in this sector that have been forced into bankruptcy.
Other companies in the cryptocurrency sector are also downsizing. Blockchain.com cut 25% of its staff in July. Coinbase has cut 18% of its workforce after two rounds of layoffs this year.
But in Google's view, the cryptocurrency sell-off is only a short-term temporary phenomenon, and the company believes that there are still clear growth opportunities in this area in the future. Earlier this month, Google said it would start relying on Coinbase in 2023, allowing customers to use encrypted currencies to pay for cloud computing services. In addition, Coinbase will move data-related applications from Amazon AWS, which has been dependent for years, to Google's cloud infrastructure.
