Alphabet Stocks Sink, Google Looks to Blockchain Investments

Alphabet, the parent company of Google, has fallen short of experts’ targets for Q1 2019.

In the hours following the news, Alphabet stocks dropped 7 percent. Many analysts claim that Google’s declining ad revenue model should be a source of worry for the tech giant.

Google’s Good News

The good news, however, is that mobile-related revenues are up significantly. According to the chief financial officer of Alphabet, YouTube, mobile searches, and The Cloud generated 17 percent higher combined revenues compared to last year. However, this increase was not enough to meet overall expectations. For comparison, Google’s year over year growth rate in Q1 2018 was 24 percent. This time around, it was 15 percent. The decline in Alphabet’s stock price may be short-sighted given that Google is not only expanding its employee base but has also made several high-profile investments in the past year. It is clear that the tech giant is positioning itself for the long-term — despite failing to meet expectations for Q1 2019.

Google’s Big Gamble: Blockchain Investments

One of the technological breakthroughs Google has been gambling on is blockchain technology. Last year, the company announced that it was developing its own blockchain-based distributed ledger as part of its Cloud services. According to a report by CBInsights, Alphabet is one of the top investors in blockchain start-ups. Decentralized cloud storage, cryptocurrency-related derivatives, digital payment rails, and blockchain-based identity verification are all areas which have received Google’s sought-after investments. The fact that Alphabet is one of the leading investors in blockchain technology should come as no surprise. The company is known for developing technologies like artificial intelligence, self-driving cars, and futuristic concepts — like Google Glass. It is a company that always tries to get the leg-up on tech-related competitors, and Google clearly sees the blockchain as a gamble worth taking. In the long term, Google may be proven right. Although Google’s ad revenue declined for Q1 2019, its investments in blockchain and other emerging technologies will likely give it a boost in the long-term. Market Reports Center conservatively estimates that the blockchain sector will be worth $60.7B by 2024 — so Google’s so-called ‘blockchain gamble’ may be more of a ‘safe bet.’ Google’s involvement with emerging technologies, like blockchain, will likely be a deciding factor in the company’s future. Maybe we should consider Google’s revenue decline as nothing more than a short-term headache for stockholders. Do you believe Google’s investments in blockchain technology and other emerging technologies will save Google’s declining revenue model? Let us know your thoughts below.