Google's parent Alphabet saw ad revenue rose during the second quarter to US$56.29 billion from US$50.44 billion. Search revenue, in particular, jumped from US$35.85 billion to US$40.69 billion, while revenue for YouTube ads rose to US$7.34 billion from US$7 billion. That said, this was still a dip in revenue for YouTube as the platform raked in US$8.6 billion during the fourth quarter of 2021.
Google Network raked in US$8.26 billion in revenue, up from US$7.6 billion in the same period last year while Google Cloud revenue rose from US$4.62 billion to US$6.28 billion. Meanwhile, APAC revenues rose 4% to US$11.71 billion during Q2 2022.
According to Reuters, Google search surpassed expectations and Alphabet's shares also rose 5.5% in after-hours trading after the results. However, overall revenue in Q2 still lagged behind Wall Street expectations by nearly US$190 million, the Wall Street Journal said.
The tech giant's Q2 revenue was US$69.69 billion, a 13% year-on-year increase which was slower compared to 23% in Q1 and 41% for the whole of 2021. Its net income for the quarter fell from US$18.52 billion to US$16 billion. The revenue slowdown follows dismal results from Twitter and Snap recently. Alphabet's shares even tumbled 3% following Snap's results.
Sundar Pichai, CEO of Alphabet and Google, said its performance in Q2 was driven by Search and Cloud. "The investments we’ve made over the years in AI and computing are helping to make our services particularly valuable for consumers, and highly effective for businesses of all sizes. As we sharpen our focus, we’ll continue to invest responsibly in deep computer science for the long-term," he added.
Alphabet executives were cautious during the recent earnings call, using the terms "uncertain" and "uncertainty" to describe the economy. CFO Ruth Porat said that In YouTube and Network, the pullbacks in spending by some advertisers in the second quarter reflect uncertainty about a number of factors that are challenging to disaggregate.
"As a company, when you’re in growth mode, it’s tough to always take the time to do all the readjustments you need to do, and moments like this gives us a chance. So, I view it as an opportunity. And so, some of the sharpening our focus is taking advantage of the moment," Pichai said.
Separately, Pichai also said earlier this month that it will slow hiring for the remainder of 2022 as a recession looms. Instead, Alphabet will concentrate on hiriring "engineering, technical, and other critical roles" this year and in 2023, according to The Business Times.
Meanwhile, Meta is predicted to record its first-ever revenue drop in its history as a public company, Reuters reported quoting IBES data from Refinitiv. The drop is estimated to be be 0.4% to about US$29 billion. Reuters added that investors are also bracing themselves for flat user growth and a third consecutive quarter of profit declines.
This comes as Meta has unveiled redesigns of Facebook and Instagram this year, mirroring the look of TikTok and its algorithm. According to Reuters, CEO Mark Zuckerberg told employees during a call that Instagram Reels formed "a huge opportunity" for the company but also acknowledged that it was "still only around 15% of the size of TikTok".
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