Alphabet Stock Tumbles: What Triggered Thursday’s Nosedive?

Another rough day for Big Tech as Alphabet shares trip over their own earnings hype.

The sell-off: Investors bailed after Q3 revenue missed estimates—turns out even Google can't monetize 'AI-powered search' fairy dust fast enough.

Ad slowdown bites: Cloud growth couldn't offset shrinking YouTube ad revenue. Cue the Wall Street downgrades.

Silver lining? $140B cash pile means they'll probably just buy whatever trend comes next. Metaverse pivot incoming?

Funny how 'disruptive innovation' always seems to end with old-fashioned profit warnings. Maybe those crypto bros were onto something with their 'decentralized everything' pitch.

Google takes it on the chin in court

That day, Google suffered a defeat, as a federal court rejected the company's appeal of a judge's order to revamp its Google Play online store policies.

Image source: Getty Images.

With the ruling, Alphabet will have to remove barriers within the digital marketplace that block developers from setting up their own in-app marketplaces and billing systems. The original injunction for Alphabet to make the change was handed down last year. It was put on hold pending a decision on the company's appeal.

Alphabet, unsurprisingly, wasn't overjoyed with the ruling. It said that it would "significantly harm user safety" and quash innovation within its app ecosystem. The app store controversy was fanned by video game developer Epic Games, which originally sued Google in mid-2020.

The company argued that the way it operated the Google Play store was tantamount to an illegal monopoly, pointing to a mandatory 30% fee for monies generated from apps. Epic also took issue with Google's requirement that developers use its Google Play Billing services, among other complaints.

Time to let bygones be bygones

Although Alphabet likely felt obligated to at least attempt to reverse the original ruling, it probably didn't stand much of a chance. That tight grip on the app store, strongly reminiscent of similar requirements once also mandated by, had come under fire from many critics. At least now Alphabet is putting the matter behind it.