YouTube has been become a part of everyday life for millions of people and the revenue earned from its adverts have been a huge source of growth for Google parent Alphabet since inception.
However, Alphabet’s earning update has signalled the first decline in YouTube’s revenue as ad sales fell 2% to $7.07 billion, missing analysts estimates of $7.42 billion.
The decline in YouTube sales were symptom of falling online advertising activity as economic conditions soften. Worries about the immediate future of the sector and poor revenue figures have sent Alphabet shares down 6% in the pre-market.
“All good things must come to an end but it is still a jolt to see advertising revenue on Google-owner Alphabet’s Youtube platform fall for the first time on record. While bad news for its parent company, the reversal in fortunes also says something less than encouraging about the state of the economy and is a negative omen for the wider digital advertising space,” said AJ Bell head of investment analysis Laith Khalaf.
Shares in Tech gains have declined sharply this year in anticipation of figures such as those from YouTube. Facebook owner, Meta, has seen its shares decline over 50% in 2022 and investors are bracing for more bad news when they report later today.