Crypto winter is hurting Google’s ad empire – Reuters

A crash in cryptocurrency prices and the start of a new so-called “crypto winter” has left many companies in the industry facing a liquidity crunch.

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Not even Google is safe from the Crypto winter.

During Alphabet’s third-quarter earnings call on Tuesday, Philipp Schindler, Google’s chief commercial officer, blamed slowing revenue growth in part on reduced advertising spending by crypto companies and other financial firms. .

“In the third quarter, we saw lower spend by some advertisers in certain search areas,” Schindler said. “For example, in financial services, we saw declines in the insurance, lending, mortgage and crypto subcategories.”

Google’s overall ad growth of 6% in the quarter was the weakest of any period since 2013 except for a quarter at the start of the pandemic. YouTube’s ad revenue was down from the previous year. CEO Sundar Pichai said the “challenging macro climate” was impacting Google’s advertising business.

Schindler referenced the crypto pullback twice, but he didn’t provide any additional color or detail. The cryptocurrency industry took a battering in 2022 as investors shunned risky assets and sold off the digital coins and related stocks they offered over the previous two years.

Bitcoin and ethereal have both lost nearly 60% of their value this year. Crypto exchange Coinbase, which went public in 2021, is down more than 70%. Meanwhile, the industry has been plagued by bankruptcies as hedge funds and lenders have seen their liquidity dry up and, in some cases, have been forced to default on debt. Celsius Network, Voyager Digital and Three Arrows Capital are some of the more notable names that have been forced into bankruptcy.

Elsewhere, companies have cut their workforces. laid off 25% of its staff in July, Coinbase cut 18% of its workforce the previous month, and undertook two rounds of layoffs this year.

For Google, there is hope that the crypto selloff will only represent a short-term blow as the company sees clear opportunities for growth in the future. Earlier this month, Google said it would build on Coinbase to start allowing customers to pay for cloud services with cryptocurrencies in 2023. Additionally, Coinbase will move data-related apps to the Google’s cloud infrastructure from Amazon Web Services, which the company has relied on for years. .

– CNBC’s Jennifer Elias and Jordan Novet contributed to this report.

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Crypto winter is hurting Google’s ad empire – Reuters

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