Google’s ad sales slow dramatically, eroding parent’s profit

SAN FRANCISCO — Summertime revenue growth at Google’s corporate parent slipped to its slowest pace since the pandemic jarred the economy more than two years ago, with advertisers clamping down on spending and bracing for a potential recession. Alphabet Inc., which owns an array of smaller technology companies in addition to Google, on Tuesday posted revenue of $69.1 billion for the July-September quarter, a 6% increase from the same time last year. In another sign of more challenging times, YouTube’s quarterly ad sales decreased 2% from last year, the first time the video site’s revenue has regressed since Google began disclosing its results in 2019. “It looks like it is going to be tough sledding for the next few quarters.” Alphabet CEO Sundar Pichai described the conditions as “uncertain” and told analysts during a conference call, “it is a moment where you take the time to optimize the company to make sure we are set up for the next decade of growth ahead.” Google’s moneymaking machine, propelled by its dominant search engine, roared back as pandemic restrictions loosened last year and government stimulus juiced the economy, helping power Alphabet to a 41% increase in its revenue last year that lifted its stock price to new peaks. The cautious remarks came after Pichai told Alphabet employees last month to be “a bit more responsible through one of the toughest macroeconomic conditions” of the past decade and urged them not to “equate fun with money.” Although the economy is squeezing its finances, Google is faring far better than other internet companies whose fortunes are tied to digital advertising.