Google has acknowledged the direct negative impact of the downturn in the digital asset market on its ad business. The growth in Google ad business in the last quarter that ended in September fell to a record low level that was witnessed only once in the entire last decade. According to the search engine technology company’s earnings call, the search ad business of Google registered only six per cent growth in the quarter. The major reason behind this low growth is said to be a slump in the crypto market.
Google’s Chief Business Officer Philipp Schindler, while making a statement in the media, noted that the revenue from financial search ads has seen a significant drop impacting overall numbers. The constantly decreasing spending of financial companies on search ads is a direct indication of market disruptions. The crypto sector market cap dropped to below the trillion dollar mark around September.
Bitcoin.com which covers every cryptocurrency market movement quoted Schindler talking about the axed ad business as saying, “For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.”
In other news, the ad revenue of Youtube also marked a downward trend on annual basis. Google CEO Sundar Pichai, while referring to the challenge, partially blamed the macro climate’s impact as a reason for the lacklustre ad business.
These are turbulent times for the crypto sector on all fronts. The major cryptocurrencies such as Bitcoin (BCH) and Ethereum (ETH) have reportedly lost as much as 60% of their value already in 2022. The sector has also witnessed a string of hedge funds and lender bankruptcies making every stakeholder apprehensive about the future. The companies such as Celsius Network, Voyager Digital, and Three Arrows Capital have experienced bankruptcy. Moreover, there has been a considerable amount of downsizing in Blockchain.com and Crypto.com.
Bitcoin.com have already reported that Coinbase, the leading American cryptocurrency exchange, saw a drop in its stock by 70 per cent in 2022, which has forced the company hands towards an 18 per cent cut in its workforce. Coinbase only went public in 2021 and was projected to be one of the most promising names in the crypto sector. The online crypto trading platform also inked a partnership deal with Google in the third quarter of 2022.
Google, however, has appeared to be hopeful that the slump in the crypto sector will be for a short period of time and that the sector has every potential to grow in the future. The company, earlier this month, also announced its plan on partnering with Coinbase for allowing its customers to make use of the platform if they wish to pay for cloud services via cryptocurrency.
However, Google is not the only company facing direct heat of this what many industry reporters are calling a “crypto winter.” Many businesses have been impacted by the downturn.
Freeway, another popular name in the crypto sector, this week announced a freeze in the buying and withdrawal services on its crypto staking platform. The company placed the blame on market fluctuations. While Freeway has just stopped the business, many went through that phase to later see a nose dive. Various crypto lenders such as Celsius Network, BlockFi, Vauld, and Voyager also first started by pausing withdrawals on their platform only to then declare bankruptcy while directly blaming market volatility.
Read More: What is Cryptocurrency?