Alphabet revealed Tuesday its most recent quarter with YouTube reporting an advertising revenue decline of 2.6% from year to year as the companies with the deepest pockets turned against the platform for its fears of economic downturn.
It only brought in $6.69 billion from YouTube to the first fiscal quarter of 2023 while pulling in $6.87 billion during the same time frame last year.

But this was still better than expectations made by analysts for an anticipated $6.6 billion.

This is now the third straight quarter where YouTube's ad revenue has fallen. The constantly sliding figures was a cause for concern and discomfort on the part of content creators, who bank mainly on this ad revenue.
The company attempted to provide positive words by touting its winning streak with respect to the short-form video feature called Shorts during its earnings call on Tuesday.

Last year, channels uploading daily to Shorts saw an over 80% increase, while channels that posted once a week on Shorts had the lion's share of new subscribers coming from those Shorts posts," said Google and Alphabet's CEO, Sundar Pichai.

Given that YouTube is facing stiff competition in its platform from competitors such as TikTok, it will continue to focus on Shorts to drive its growth. In November 2022, YouTube launched its Shorts to smart TVs. In February, Google said that Shorts has reached 50 billion daily views.

"We're seeing strong watch time, growth… monetization is also progressing nicely. People are engaging and converting on ads across Shorts at increasing rates," Google's chief business officer, Philipp Schindler said.

YouTube too reaffirmed plans to intensify efforts on making YouTube more "shoppable." The company struck a partnership with Shopify in 2020 to allow YouTubers and merchants to use their channel to feature a product or service.

"Shopping on YouTube… It's still super early days. One highlight last year, we brought shopping to more creators and brands by partnering with commerce platforms like Shopify. Today more than 100 000 creators, artists and brands connect their own stores to sell directly in their YouTube channels. Looking really forward to how that continues to grow", commented Schindler.

The company revealed to TechCrunch in November that it planned to include shopping features on Shorts.

Parent company Alphabet said revenue for Q1 2023 reached $69.8 billion, growing 3% from the same year-ago period.

YouTube CEO Susan Wojcicki retired in February and will serve in an advisory capacity across Google and Alphabet. Neal Mohan, chief product officer, is the new CEO.

Alphabet reduced its workforce size by 6% or 12,000 employees in January.