oogle’s Mother company – Alphabet will probably have its slowest revenue growth in the four quarters this Tuesday. These numbers are influenced by the
weighted Google Search Business core and also affect YouTube’s spending.
This slowdown is also expected to affect AI-driven profits and its cloud-computing business in Q3. Even more so, this was Alphabet's first quarter since Anat Ashken took over in the position of finance chief from Ruth Porat.
Alphabet’s dominance in the digital market can be threatened by Amazon or TikTok as they have become popular among advertisers who are ready to dive into a pool of buyers. Yet, those are not the only risks that Alphabet is facing as regulatory issues regarding Google’s “illegal monopoly”, that allegedly happened on their online search.
Even more so, analysts from Visible Alpha predict Google Search revenue to grow by 11.6% in the third quarter, which is a slower growth compared to the 13.8% growth from the second quarter.
MoffettNathanson analysts reported that “New entrants like Perplexity and ChatGPT are raising billions of dollars on the premise that search can now be disrupted; Google has been seen as slow, unprepared ... to the development of GenAI,". and that “Some of this negative narrative will be hard to disprove in the coming year,”.
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The analysts also added that significant changes are expected in the next period as well as the ability to keep exclusive search advantages on Android and Apple phones in the US. Earlier this month a report brought tension between investors as a research firm named eMarketer said that Google’s share of US’s search revenue can fall below 50% next year. This would be the first time in 18 years that this has happened. In the last three months, Alphabet’s share dropped by 9%, which is the mark of the biggest quarterly drop that has been seen since 2022.
YouTube is also expected to suffer from some of the market changes, However, YouTube’s revenue rose by 11.5% compared with a 13% increase from the second quarter.
This July, Alphabet also warned that capital expenses will remain higher after the company has invested more in artificial intelligence in order to keep up with its competition.
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