Following Alphabet Inc. Google's report that it was 'enough to eat', YouTube also recorded performance below projections for 2 quarters in a row.
It is understood that its quarterly ad sales grew at a slower pace, underscoring the same problems faced by Meta Platforms Inc.
Examining the YouTube report, increased competition from TikTok behind the shaky economic situation is a factor in the company's decline in performance.
Not forgetting the effects of the war and changes in Apple Inc's security updates also had an impact on the fall of YouTube.
Looking at the report, YouTube's advertising revenue grew 4.8% in Q2 but was 1% lower than its growth during the first month of the pandemic.
It indirectly signals that YouTube ads are vulnerable to poor economic conditions compared to ad sales of Alphabet's biggest business, Google Search.
It was detailed that YouTube ad sales were up $7.3 billion but down from $7.5 billion while Google Search ad sales were up 13.5% at $40.7 billion in Q2.
As Google's Chief Business Officer, Philipp Schindler, explained, market uncertainty is causing some advertising to pull back on spending.
In the meantime, the strong competition factor from TikTok is also the main highlight of analysts and companies.
The boom in popularity of TikTok's short videos is seen as a major threat to YouTube's similarly core-driven service.
Needham analyst Laura Martin's argument, TikTok surpasses YouTube in dominating content creators (creators) and the amount of time users spend watching videos.
One of YouTube's efforts in competing with TikTok is to introduce Shorts that feature short videos.
On the other hand, analysts raised YouTube's sales growth forecast in 2022 to 4.7% from 1.5% following a weaker Q2 performance than expected.
