Alphabet, which owns Google, earns 21% less than in 2021

the internet giant alphabetG matrixGoogleon Thursday announced net income of $59.972 million in 2022, 21% less than a year earlier, although its billing improved nearly 10% to $282.836 million.

The company, which operates the world’s most used search engine and massive platforms like YouTube, has been ripping the markets with its accounts and, after rising sharply during the trading session, its shares fell about 6% in the after-hours electronic trading. .

In the last quarter of the year, which investors paid more attention to today, Alphabet reported net income of $13.624 million, down 34% year-over-year, while revenue grew 1 %, up to 76,048 million. .

Both figures were lower than analysts’ expectations, largely due to the deterioration of its giant advertising business – which accounts for the majority of its revenue – due to the current economic situation.

Alphabet earned $59.042 million from advertising between October and December, compared to $61.239 million in the same period a year earlier, with decreases in both search engine ads and YouTube ads, which had grown sharply during the pandemic and are losing steam with the return to normal.

The company based in Mountain View (California, USA), world leader in the field of Internet advertising, is also feeling the effects of the general reduction in advertising expenditure resulting from the economic slowdown.

The positive side of the relationship

In the positive section, he highlighted strong growth in recent months in the cloud services business, for which Alphabet earned $7,316 million in the fourth quarter of 2022, up from $5,541 million in the same period of 2021.

At the end of January, Alphabet followed the path of other tech giants and announced a reduction in the workforce of about 12,000 people, 6.4% of the total, after the high number of hirings it had carried out during the pandemic.

In a statement Thursday, he anticipated that these departures will cost him between $1.9 billion and $2.3 billion in compensation and other expenses, which will mostly be recorded in Q1 2023 accounts.

Alphabet also said it is taking steps to reduce its office space and expects to incur a charge of around $500 million for it.

Regarding the situation of the company, the CEO, Sundar Pichai, highlighted the good progress of the cloud business, subscriptions to YouTube and its Pixel devices, as well as the long-term investments he has made to leverage the takeoff of intelligence artificial and its predictable increase in a short time.

In this sense, Pichai said that the company is preparing to soon present improvements in its searches and other services that use artificial intelligence technologies, one of the main competitions in this sector thanks to the success of ChatGPT, where Microsoft has invested millions.