What happened: In its latest earnings, Google parent Alphabet reported a slowdown in revenue and profit growth as it grappled with its second back-to-back drop in ad sales. What the numbers say: It's only the third time the company's ad sales have fallen YoY since its 2004 IPO. The rare drop in Google's main moneymaker comes after it saw ad revenue fall 3.6% in the prior quarter. YouTube slowdown: Broken down further, Google's YouTube saw its third straight drop in ad sales in Q1. The video-sharing platform's revenue fell to $6.7B, down 3% from the prior year. YouTube ad sales saw huge growth starting in early 2020 before slowing down in 2021, according to Reuters data. On a positive note: Alphabet's decline in ad sales was still not as bad as analysts had expected. Its overall revenue and profit beat Wall Street's muted expectations, while the company's announcement for a $70B stock buyback plan helped to push up its shares in pre-market trading.
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In an unexpected blow to Microsoft, Britain's antitrust regulator has moved to block the tech giant's $68.7B purchase of Activision Blizzard, saying the deal would harm the burgeoning cloud gaming market. Microsoft says it will appeal the decision, which delivers a significant setback to the largest-ever deal in gaming. More: - The U.K. Competition and Markets Authority (CMA) estimates that the deal would give Microsoft a 60-70% cloud gaming market share, weakening competition and giving it the incentive to exclude games from rivals.
- The CMA determined that, if the deal went through, Microsoft would consider it commercially advantageous to make Activision Blizzard games, such as "Call of Duty" and "Overwatch," exclusive to its own cloud gaming service.
- After analyzing more than 3 million documents and 2,000 emails from the public, the CMA concluded that the takeover would lead to less innovation and ultimately fewer choices for gamers.
Deals: - In an effort to alleviate the CMA's concerns, Microsoft brokered deals with rival services, including one to bring Xbox PC games to Nvidia’s cloud gaming service.
- Another 10-year contract with Nintendo would ensure that "Call of Duty" games are released to Nintendo players on the same day they're launched on Xbox, with the same content.
- However, in examining these deals, the CMA claimed that they had "significant shortcomings” and are “too limited in scope."
- For example, the agency said the deals lacked the ability for competitors "to offer versions of games on PC operating systems other than Windows."
Response: - In response to the news, Microsoft president Brad Smith said it remains "fully committed to this acquisition and will appeal."
- He said the CMA's decision "discourages technology innovation and investment" in the U.K. and "appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”
- Activision stood by Microsoft's efforts to appeal, with CEO Bobby Kotick saying it is confident that the deal "benefits competition, consumers, and job creation in markets around the world, especially in the U.K."
THE NEW YORK TIMES 
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Microsoft released its latest quarterly earnings on Tuesday, beating analyst expectations for sales and earnings per share. The company's revenue increased 7% to $52.86B from $49.36B a year ago. More: - While the revenue growth was above estimates, it marked the second straight quarter of growth below double-digit percentages.
- Per-share earnings of $2.45 were well above estimates of $2.23.
- Revenue for Microsoft's Azure and other cloud-computing services was up 27%, a deceleration from prior years.
- The company also saw an 8% jump in LinkedIn revenue from the prior year.
- On the PC side, Windows revenue from computer makers was down 28%.
Zoom Out: - As of market close Tuesday, Microsoft’s market capitalization stood at $2.05 trillion, higher than Google parent Alphabet's $1.36 trillion.
- Microsoft has been locked in an AI race with Google. The former has seen its shares rise since it introduced ChatGPT technology into its Bing search engine and other offerings this year.
- In January, ChatGPT maker OpenAI announced a $10B investment from Microsoft, which has seen Bing traffic climb over 15% since it incorporated ChatGPT.
- On Tuesday, Microsoft finance chief Amy Hood said the company will continue to invest in its cloud infrastructure, with an emphasis on AI-related spending, in an effort to meet demand.
BARRON's
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Facebook's advertising system experienced a glitch on Sunday, charging some advertisers up to four times more money than they had agreed upon, according to CNBC. Meta, Facebook's parent company, briefly stopped displaying some ads without fully notifying or explaining the bug to its millions of customers. The company says the glitch has since been fixed. More: - The issue began around 1 a.m. PT on Sunday, when a number of advertisers said they saw their accounts being charged up to four times their daily budgets in only hours.
- Some said they were charged for ads that no one saw.
- Meta cited a "technical issue" involving an automated system that primarily impacted ad delivery on Facebook and to a lesser extent, Instagram.
- Meta told advertisers online that it had resolved the issue by Tuesday and campaign deliveries had "returned to normal" across its Audience Network and other platforms.
- The company has pledged a "normal refund process" to those affected.
Zoom Out: - Meta's system is reportedly limited to spending up to 25% beyond the daily budgets set by advertisers.
- A spokesperson said it doesn't have evidence that the company charged its customers beyond the 25% limit, or for ads that weren't being seen.
CNBC
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A Japanese lunar lander, built by Ispace and carrying a UAE-built rover, lost contact shortly before it was expected to land on the Moon's surface, suggesting that it had crashed. The Hakuto-R Mission 1 lander, set to touch down on the lunar surface around 1:40 a.m. Japan time Wednesday, would have been the first such landing for a commercially-developed spacecraft. More: - The lander was launched atop a SpaceX rocket from Florida in December, carrying the UAE's first lunar rover as well as payloads from NASA and JAXA, the Japan Aerospace Exploration Agency.
- Over three months, it traveled 870,000 miles to enter lunar orbit.
- On Tuesday, Ispace said the lander lost contact with ground controllers shortly before its final approach, suggesting it had made a "hard landing."
- The company has now concluded that the mission success is no longer achievable. It plans to examine the data and learn from the event to facilitate a "future successful lunar landing mission."
- Ispace has scheduled a Mission 2 launch in 2024 and Mission 3 in 2025.
ENGADGET
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Apple is developing an AI-powered health coaching service, per a Bloomberg report. The tool, which may or may not be released to consumers, would analyze data from a user's Apple Watch to offer personalized coaching programs for eating, exercise, and sleep. More: - The AI coach, codenamed "Quartz," is expected to have a monthly fee.
- Several Apple units, including its AI, health, and Siri teams, are said to be working on the AI service, which is due out in 2024.
- According to Bloomberg, the project could still be "canceled or postponed."
- In addition to the AI health service, Apple plans to add tools to its health app for managing vision conditions and tracking emotions.
- The latter would eventually rely on algorithms to better gauge and understand a user's mood based on different data.
Zoom Out: - The plans are separate from Apple's forthcoming iPhone journaling app, which will let users log their thoughts and activities throughout the day. That app would track and analyze those behaviors to suggest topics to write about and more.
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- Google Cloud, the tech giant's cloud computing unit, has launched a new initiative to support Web3 startups that want to build projects on its services.
- CNBC uncovered some Amazon reviews that were written using AI as they contained the phrase "As an AI language model" that's used by OpenAI's ChatGPT.
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 |  | Beth is a writer and editor at Inside.com covering artificial intelligence and daily technology news. She has written the Inside AI newsletter since 2019. You can reach her at Beth.Duckett@inside.com. |   | | Editor | Eduardo Garcia is a writer and editor based in New York. He is the author of "Things You Can Do," an illustrated book about climate action. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade. | |
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