Crypto winter hit Google’s revenue growth as digital asset companies and other financial firms reduced ad spending.
Philipp Schindler, Google’s chief business officer, said the company saw a pullback in spending in the third quarter by some advertisers in certain areas such as loan, mortgage, insurance, and crypto subcategories. Google saw the weakest ad growth of 6% for any period since 2013. Google CEO Sundar Pichai outlined that the challenging macro climate is having an impact on the company’s ad business. Schindler didn’t provide any details or specifics but referenced the crypto pullback twice.
The cryptocurrency industry since the beginning of 2022 has been battered as investors fled risky assets and sold out of digital coins, and related stocks that they bid on in previous years. Data shows that the top two cryptocurrencies Bitcoin and Ethereum lost nearly 60% of their value this year. And Coinbase, a crypto exchange that went public in 2021, is down by over 70%. The crypto industry has been hit by bankruptcies with hedge funds and lenders – such as Celsius Network, Three Arrows Capital, and Voyager Digital – seeing their liquidity dry up. They were also hit by debt. Companies took to laying off staff – Blockchain.com did away with 25% of its staff in July and Coinbase by 18%, while Crypto.com undertook two rounds of layoffs.
Google hopes the crypto sell-off represents just a short-term blip. It sees clear opportunities for growth in the future. Google said earlier in the month that it will rely on Coinbase to let customers pay for cloud services with cryptocurrencies in 2023.