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YouTube revenue disappoints and shares drop for Alphabet as Google misses on sales

Alphabet, a multi-national conglomerate including Google and other subsidiaries, didn´t quite reach revenue expectations in Q4 2019.

Sundar Pichai, Alphabet´s Chief Executive, revealed long-awaited sales figures that investors have been waiting for, with the results provoking a 5 per cent drop in shares.

Google´s advertising business and the new data about YouTube and Google Cloud severely disappointed investors and triggered concerns, leading to the worst fourth-quarter revenue growth since 2015.

Pichai had previously set out to counter slowing revenue growth in the company´s main advertising business by focusing on the company´s younger units. However, Google´s YouTube video streaming asset was expected to generate annual revenue of $25 billion, but it is currently producing $15 billion.

Although financial analysts praised Alphabet´s new transparency, some questioned for the second time in the last four quarters to explain why overall revenue has been missing or barely reaching expectations.

In 2019, sales growth fell below 20 per cent in three quarters, compared to just once in the previous three years.

Alphabet has blamed the disappointing figures on currency rates and its constant amendments to features, saying that it’s not solely focused on quarterly returns.

“We continue to be very focused on the benefit from better measurement, better ad delivery, better user experience” Alphabet Chief Financial Officer Ruth Porat responded to an analyst. “But there will be variability over time because we’re very focused on what’s in the right long-term interest.”