Cryptocurrency threatens Google's advertising empire
The chief business officer of Alphabet Inc., the owner of Google, Philip Schindler, has accused crypto companies of being responsible for a partial slowdown in the company's advertising revenue growth and a decline in advertising spending by crypto companies and other financial firms.
"In the third quarter, we saw a decrease in spending by some advertisers in certain areas of Google," Schindler said.
"For example in financial services, we have seen a decline in the subcategories of insurance, loan, mortgage and cryptocurrency," he added.
Google's overall ad growth rate was about 6% in the third quarter, the weakest in any period since 2013, with the exception of the third quarter after the start of the Corona pandemic.
The company said that YouTube's advertising revenue shrank from the previous year.
"The challenging macro climate is having an impact on his company's advertising business," said Alphabet CEO Sundar Pichai.
The performance of the digital currency sector declined during the current year 2022, as investors fled from risky assets and sold digital currencies and related stocks that they had speculated on during the past two years.
Both Bitcoin and Ethereum have lost nearly 60% of their value this year.
Cryptocurrency exchange Coinbase also went public in 2021, but its value has fallen by more than 70%.
Meanwhile, the sector has experienced some bankruptcies as hedge funds and lenders have seen their liquidity run dry and, in some cases, have had to default on debt.
In other locations around the world, companies operating in this sector have been scaled back.
Blockchain.com laid off about 25% of its staff in July, Coinbase cut about 18% of its workforce the previous month, and Crytpo.com has conducted two rounds of layoffs this year.
CNBC International said that for Google, there is hope that the sale of cryptocurrency will only represent a short-term picture, as the company sees clear opportunities for growth in the future.
Earlier this month, Google said it would rely on Coinbase to start allowing customers to pay for cloud services with cryptocurrency in 2023. In addition, Coinbase will move data-related applications to Google's cloud infrastructure from Amazon", which the company has relied on for years.
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