Not even Google itself can become immune from the formidable Crypto winter. During Alphabet’s third-quarter earnings call, Philipp Schindler, the company’s chief business officer, explained that the company’s revenue growth had slowed down due to the reduction in ad spending by financial firms and crypto companies.
According to Schindler, some advertisers had decreased their spending in certain areas of search during the third quarter. For instance, in financial services, there was a reduction in the number of ads placed in the mortgage, crypto, and insurance categories.
During the third quarter, Google’s ad revenue also grew at a slower rate of 6%, which was the lowest since 2013. YouTube’s ad revenue decreased from a year earlier. According to CEO Sundar Pichai, the company’s ad business is affected by the challenging macro climate.
During the call, Schindler referred to the crypto decline twice, though he provided no additional details. The industry has been in a slump since the beginning of the year, as investors have started to exit risky assets and sell off the stocks that they bought during the previous years.
Ethereum and Bitcoin have lost around 60% of their value this year. On the other hand, the industry has been affected by bankruptcies, as lenders and hedge funds were unable to maintain their liquidity. Some of the prominent names that have been forced to file for bankruptcy include Celsius Network, Three Arrows Capital, and Voyager Digital.
Other companies have also started to reduce their workforce. For instance, Blockchain.com, which was one of the leading platforms in the industry, laid off 25% of its staff in July. Coinbase also cut its workforce by 18% in the previous month.
Despite the recent decline in the value of cryptocurrencies, Google is still positive about the potential of the industry and believes that the sell-off will only be a short-term setback. In July, the company announced that it would partner with Coinbase to allow its customers to pay for cloud services using cryptocurrencies.
Coinbase will transfer its data-related applications to the cloud infrastructure of Google. This will allow the company to continue to provide its customers with the best possible service.
Dil Bole Oberoi
