The cryptocurrency rates drop, named in some circles 'crypto winter', has affected many areas of business - and not only those directly related to the crypto world. Google's advertising business has also been hit hard.
According to CNBC, Google's advertising revenue growth slowed drastically in the third quarter of 2022 to just 6%. Experts noted that this is the lowest growth rate since 2013 - the only exception was one quarter at the beginning of the pandemic.
Experts believe that one of the reasons for the current decline in revenue growth is the reduction of advertising spending by companies working in the field of finance and cryptocurrency.
“In the third quarter, we did see a pullback in spend by some advertisers in certain areas in search,” Philipp Schindler, Google’s chief business officer said. “For example in financial services, we saw a pullback in the insurance, loan, mortgage, and crypto subcategories.”
He mentioned the problem of cryptocurrency depreciation and its negative impact on the advertising business twice in his comments, though without further details or explanations.
In 2022, the cryptocurrency began to depreciate sharply as investors, unwilling to deal in risky assets, sold off digital coins and related stocks they had bought in a previous couple of years. As a result, bitcoin and ethereum have lost about 60 percent of their value this year, and shares of the cryptocurrency exchange Coinbase have depreciated by more than 70 percent.
The industry has also been hit hard by the bankruptcy of some crypto companies; Celsius Network, Voyager Digital, and Three Arrows Capital are among the more prominent companies that have been forced to declare bankruptcy.
Other companies have been forced to cut costs and lay off some staff. Blockchain.com, for example, had to cut 25% off its staff, Coinbase had to cut 18%, and Crytpo.com had two rounds of layoffs this year.
This situation is what the market has begun to call crypto winter.
Despite the current difficulties, Google executives hope that the problems in the cryptocurrency market are temporary and that things will change for the better in the future.
Google recently announced strengthening its partnership with the Coinbase cryptocurrency exchange: since 2023, Google cloud services can be paid in cryptocurrency, but this function will be available not to all users.
And this is not the only crypto-related feature. Google has recently introduced several other services and features: ethereum wallet balance is now displayed when searching for an address in Google, and BNB Chain is working with Google Cloud to support the growth of Web3 and blockchain startups at an early stage.