The Desk appreciates the support of readers who purchase products or services through links on our website. Learn more...

YouTube posts ad revenue drop during third quarter

(Logo: YouTube/Google, Background image: Pexels, Graphic: The Desk)

Streaming video platform YouTube says it brought in less advertisement revenue during its most-recent financial quarter compared to one year ago, a signal that its parent company Alphabet continues to struggle with ongoing shifts in the advertising space.

On Tuesday, Alphabet (formerly Google) said YouTube ads earned the company $7 billion in the three-month period ending September 30, about a 3 percent drop compared to the $7.2 billion YouTube earned the search giant around this time last year.

Overall, Alphabet says it earned around $69 billion in revenue from its advertising, cloud computing and other businesses, a 6 percent increase compared to last year but still below what Wall Street analysts had estimated for the company.

Alphabet’s earnings mark the fifth straight time the company has posted a drop in revenue compared to its previous financial quarter. Shares of Alphabet’s Class A stock were down nearly 6 percent in after hours trading to around $98; the company’s stock was at $104 prior to its earnings report.

Alphabet still generates the majority of its revenue through advertising, a space that has seen increased competition from digital upstarts backed by major technology and media firms. The lackluster earnings come as other tech companies, like Snap, have reported similar declines in advertisement revenue; other firms, including Facebook’s Meta, are expected to do the same.

Slowdowns in advertising revenue come as goods and services companies pull back spending due to rising interest rates and costs spurred by inflation. At Alphabet, an increase in political ad spending during the midterm election cycle was apparently not enough to offset losses from companies that adjusted their spending due to overall economic factors.

Photo of author

About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).