Google admits crypto-currency winter hurts advertising business

The slowdown in the digital asset market that has triggered the current crypto winter is negatively impacting search spending, Google has admitted. The company revealed this week that ad growth in the third quarter hit its lowest level in nearly a decade.

With fewer ads for crypto-currencies, Google sees 6% growth in ad revenue last quarter.

Online advertising giant Google partially attributed its slower revenue growth to lower ad spending by financial companies, including those working with crypto assets. At parent company Alphabet’s earnings call Tuesday, Google’s chief commercial officer Philipp Schindler admitted to seeing a reduction in search spending in the third quarter and said:

For example, in financial services, we saw a decline in the insurance, loan, mortgage and crypto subcategories.

In a report quoting the executive, CNBC noted that the with overall ad growth of 6%, the three-month period was Google’s weakest among all quarters since 2013, with one exception, at the start of the Covid-19 pandemic.

Youtube’s ad revenue also declined on a year-over-year basis, with Google CEO Sundar Pichai citing the impact of the tough macroeconomic climate on the ad business.

Major crypto-currencies like bitcoin and ethereum lost nearly 60 percent of their value in 2022, compared to their historical highs. Since then, the crypto-currency industry has seen a series of hedge fund and lender failures, including Celsius Network, Voyager Digital and Three Arrows Capital, as well as downsizing at companies like Blockchain.com and Crypto.com.

Leading U.S. crypto-currency exchange Coinbase has cut its workforce by 18 percent and its stock has fallen 70 percent this year after the company goes public in 2021. Google announced a partnership with the crypto-currency exchange in the third quarter of this year.

Earlier in October, Google revealed that it will leverage Coinbase to allow customers to pay for its cloud services with crypto-currencies in 2023, an indication of the tech giant’s hope that the crypto-currency winter will be short. Coinbase is also expected to move data-related applications to Google’s cloud infrastructure.