It has been a rough year for companies that rely on online advertising for their revenue, but many on Wall Street believed that Alphabet Inc.’s stock was a safe haven amid the uncertainty.
While it is true that Google seems to be holding up better than competitors — Facebook parent Meta META, +1.29%, which reports earnings Wednesday, already detailed its first-ever revenue decline last quarter, and Snap SNAP, +5.44% posted worrisome earnings last week — the search giant is still not a “safe haven,” as Baird Equity analyst Colin Sebastian dubbed it last July.
Schindler called out financial services as especially weak for advertising — insurance, loan, mortgage and cryptocurrency ads seem to have dried up. Additionally, the stronger dollar hurt, as did a slowdown in the Google Play Store, which was a big gaming hub last year but has seen those revenues decline.
It shouldn’t be hard for executives to slow down the pace of their hiring. Chief Financial Officer Ruth Porat said the company had hired 12,765 people in the third quarter for a total of 186,779 employees, a 24.5% increase in head count from last year.
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