The announcement was expected as Google CEO Sundar Pichai been on a belt-tightening for three months.
Revenue was up six per cent year over year to $69.1 billion, a sharp growth decline from 2021 third quarter, which saw 41 per cent growth. Profits were at $13.9 billion, down from $18.9 billion in third quarter 2021.
The problems were mostly in Google ad revenue and click-through rates, with the company citing reduced spending from the "insurance, loan, mortgage, and crypto subcategories" in particular. Worries about the economy and inflation are causing many Google customers to cut their ad budgets.
Alphabet doesn't break down the non-ads business in much detail, but the two biggest money losers on Alphabet's reports are the "Other Bets" section and Google Cloud. Other Bets lost $1.6 billion, more than the $1.29 billion loss a year ago. "Other Bets" is the "non-Google" part of Alphabet and includes long-term R&D projects like Waymo self-driving cars and the "Wing" drone delivery project. Google says the only significant revenue generators for Other Bets are the "health technology" projects—that would be Verily and/or Calico—and "Internet services," aka Google Fiber.
Google's Cloud, lost $699 million this quarter, up from $644 million in Q3 2021. "Google Cloud" on the earnings report combines the Amazon Web Services-fighting infrastructure business and Google Workspace's suite of productivity apps like Gmail and Google Docs. Workspace definitely earns money by showing ads to its three billion users, charging for user storage, and charging businesses for Gmail accounts with custom domains.
The infrastructure business—Google Cloud Platform—is growing, but it's still struggling as the number three cloud provider behind Amazon and Microsoft.
Google CEO Sundar Pichai admitted that productivity was not where it needs to be.” He has slowed hiring since August, revamped the employee evaluation process, and said the company should be "more mission-focused" and "20 per cent more efficient."
Google Hardware's laptop division was shuttered down, the experimental "Area 120" group was forced to ax half its projects, the Project Loon leftovers were spun out into a separate company, and Google Stadia was shut down. YouTube has been trying (and canceling) a series of revenue-boosting experiments like adding up to 10 unskippable pre-roll ads to videos and charging for 4K resolution and jacked up the 27 per cent price hike for YouTube Premium family plans.