YouTube's revenue falls as ads slow down for 3rd quarter in a row

Google-owned YouTube saw its revenue from ads falling 2.6 per cent (year-on-year) in the March quarter -- third quarter in a row that its ad revenue has decreased.

YouTube logged $6.69 billion in advertising revenue for the quarter that ended March 31, compared to $6.87 billion during the same period last year.

The company, however, is seeing growth in Shorts as watch time and monetisation is "progressing nicely".

"People are engaging and converting on ads across Shorts at increasing rates," according to Philipp Schindler, Google`s chief business officer.

According to Sundar Pichai, Alphabet and Google CEO, the number of channels that uploaded to Shorts daily grew over 80 per cent last year.

"Those posting weekly on Shorts saw the majority of new channel subscribers coming from their Shorts posts," he informed during the analysts` call late on Tuesday.

Overall, Alphabet reported $69.8 billion in revenue for the first quarter, a 3 per cent increase (on-year).

"We are pleased with our business performance in the firstAquarter, with Search performing well and momentum in the Cloud. We introduced important product updates anchored in deep computer science and AI," said Pichai.

Ruth Porat, CFO of Alphabet and Google, said that resilience in Search and momentum in Cloud resulted in Q1 consolidated revenues of $69.8 billion, up 3 per cent year over year.

"We remain committed to delivering long-term growth and creating capacity to invest in our most compelling growth areas by re-engineering our cost base," said Porat.

In January, Alphabet slashed 6 per cent of its workforce, impacting 12,000 employees.

"As of March 31, 2023, the number of employees includes almost all of the employees affected by the reduction of our workforce. We expect most of those affected will no longer be reflected in our headcount by the end of the second quarter of 2023, subject to local law and consultation requirements," said Alphabet.