Search engine giant Google parent company Alphabet reported on Tuesday an unexpectedly sharp slowdown in the company’s core search advertising business. This sent tech stocks into a tailspin and fueled fears of a slowdown in the US economy.

Alphabet said its turnover increased by six percent to 69.1 billion dollars in July-September.

According to the Financial Times, the growth was the slowest since 2013. According to the FT Refinitivin the analyst forecast expected a growth of nine percent.

Alphabet’s share fell 6.7 percent on the secondary market.

Google Search’s revenue increased by 4.2 percent to 39.5 billion dollars. Turnover thus fell far short of the predicted eight percent growth.

The turnover of YouTube ads decreased by two percent to 7.1 billion dollars, falling short of the 4.4 percent growth expected by analysts. According to FT, the turnover in question fell for the first time since the company started reporting YouTube figures separately in 2020.

CEO of Alphabet in an investor call Sundar Pichai stated, according to FT, that times are difficult for the advertising market.

“This is a bad omen for digital advertising in general, especially if the market conditions continue to deteriorate”, commented to the FT Insider Intelligencen analyst Evelyn Mitchell.

Google Cloud’s revenue grew by 38 percent to $6.9 billion.

Alphabet reported diluted earnings per share of $1.06 for July-September. In the comparative period a year earlier, it was $1.40. Analysts were expecting $1.25 in diluted earnings per share.

Microsoft’s net profit fell

Also a tech giant Microsoft announced its results on Tuesday. According to FT, the company did not cheer up the mood of the technology sector, as it warned of a clear slowdown in its cloud computing business in the coming months. FT writes that cloud computing has been considered a less vulnerable business than other areas of the technology industry during the economic downturn.

On Tuesday, Microsoft reported a turnover of 50.1 billion dollars for July-September. The turnover reported a year earlier was 45.3 billion dollars. According to Reuters, Microsoft’s revenue reached slightly more than analysts’ forecast of 49.6 billion dollars. July–September is Microsoft’s first quarter.

Microsoft’s net profit shrank to 17.6 billion dollars in the quarter from 20.5 billion a year ago.

The company’s shares fell 6.7 percent on the secondary market.

Today, Wednesday, the company that owns Facebook, Instagram and WhatsApp will announce its July-September results Meta Platforms.