- Philipp Schindler, Google's chief business officer, said on Tuesday that financial services companies, including in crypto, pulled back on search spending in the third quarter.
- Google parent Alphabet reported disappointing results, as revenue growth dipped to 6%.
- Google partnered during the quarter with crypto company Coinbase, whose stock price is down 70% this year.
Not even Google is immune from the Crypto winter.
In Alphabet's third-quarter earnings call on Tuesday, Philipp Schindler, Google's chief business officer, blamed a slowdown in revenue growth in part on reduced ad spending by cypto companies and other financial firms.
"In the third quarter, we did see a pullback in spend by some advertisers in certain areas in search," Schindler said. "For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories."
Google's overall ad growth of 6% in the quarter was the weakest for any period since 2013, other than one quarter at the beginning of the pandemic. YouTube ad revenue shrank from a year earlier. CEO Sundar Pichai said the "challenging macro climate" is having an impact on Google's ad business.
Schindler referenced the crypto pullback twice, but he didn't provide any additional color or specifics. The cryptocurrency industry has been battered in 2022, as investors have fled risky assets and sold out of digital coins and the related stocks that they bid up the prior couple years.
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Bitcoin and ethereum have both lost close to 60% of their value this year. Crypto exchange Coinbase, which went public in 2021, is down by over 70%. Meanwhile, the industry has been beset by bankruptcies as hedge funds and lenders saw their liquidity dry up and, in some cases, were forced to default on debt. Celsius Network, Voyager Digital and Three Arrows Capital are some of the more notable names that were forced into bankruptcy.
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Elsewhere, companies have downsized. Blockchain.com laid off 25% of its staff in July, Coinbase cut 18% of its workforce the prior month, and Crytpo.com has undertaken two rounds of layoffs this year.
For Google, there's hope that the crypto sell-off represents just a short-term blip, as the company sees clear opportunities for growth in the future. Earlier this month, Google said it will rely on Coinbase to start letting customers pay for cloud services with cryptocurrencies in 2023. Additionally, Coinbase will move data-related applications to Google's cloud infrastructure from Amazon Web Services, which the company has relied on for years.
— CNBC's Jennifer Elias and Jordan Novet contributed to this report.
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