Google parent Alphabet, widely considered the dominant player in the digital advertising space, has been struggling alongside the rest of the tech sector this year.
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Alphabet reported weaker-than-expected earnings for Q3 on Tuesday, per CNN Business — a result of the tough economic climate and some serious competition from social media platform TikTok.
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Alphabet‘s revenue totaled $69.1 billion and earnings per share of $1.06 for Q3 — falling far short of analyst forecasts, Variety reported. YouTube, owned by the parent company, also failed to live up to expectations with its $7.07 billion in ad sales, a 1.9% decrease compared to the previous year.
Part of the issue? TikTok. It became the most downloaded app in the world in 2022, per The Guardian, and is on track to overtake YouTube as the social media platform users spend the most time viewing by the end of this year.
And it looks like that’s a sign of things to come for the rest of the industry.
“When Google stumbles, it’s a bad omen for digital advertising at large,” Insider Intelligence’s principal analyst Evelyn Mitchell told CNN Business, adding, “This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate.”
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Alphabet Inc Class A is down nearly 36% year over year.