Google’s Immunity Doesn’t Quite Hold


First-quarter advertising revenue for Google parent Alphabet fell shy of Wall Street expectations.



Google is resilient, but it isn’t bulletproof.

First-quarter results from parent company

Alphabet Inc.

GOOG -3.04%

on Tuesday afternoon showed that the world’s largest online advertising company is hardly immune to the pressures being felt by others in the sector. Total advertising revenue grew 22% year over year to $54.7 billion, but still fell shy of the $55 billion expected by Wall Street. The main culprit was YouTube, where ad revenue of nearly $6.9 billion fell about 8% short of the $7.4 billion analysts were expecting. YouTube’s ad revenue also saw substantial deceleration, growing 14% on year in the most recent quarter compared with 25% growth in the December period and 49% growth in last year’s first quarter.

The results took Alphabet’s share price down 3% after-hours even following a drop of nearly 4% during the market’s selloff in the regular session. The stock is down 18% so far this year through Tuesday’s session, but it has notably outperformed others in the online advertising space due to a belief that the company’s ad business, based mainly on search, was least exposed to the multi-headed challenges of growing inflation, supply chain woes and the war in Ukraine. Shares of




Platforms—Google’s biggest rival in ads—are down 46% so far this year.

Google’s actual results won’t improve confidence in the group. The company noted in its conference call Tuesday that within the YouTube business brand advertising was strong compared with direct-response ads. That contrasts a bit with results last week from


parent Snap Inc., which reported that its brand advertising business in particular was hit by “supply chain and labor supply headwinds.” But relative to Google’s other ad segments, YouTube is also seen as more vulnerable to the surging popularity of rival video platform TikTok, which has even more significantly affected the outlook for Facebook. Meta’s share price fell another 3% after-hours following Alphabet’s results.

Google is still in excellent shape financially. The company added $70 billion to its buyback plan—after repurchasing more than $50 billion in shares over the last 12 months—despite a “meaningful increase” in capital spending planned for this year. Operating earnings of $20.1 billion for the quarter even came in 2% ahead of Wall Street’s projections despite the advertising revenue miss. But with the forces weighing down the global online ad business unlikely to abate in the second quarter, the biggest player in the business won’t remain unscathed.

Write to Dan Gallagher at

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