Google's growth slows as COVID-19 hits ads

NEWS DESK

Google reported its weakest revenue growth in nearly five years in the first quarter as the pandemic-driven recession began to shrivel its advertising sales.

The January-March earnings for Google parent Alphabet offer a first look at how the digital ad market has fared amid widespread orders requiring consumers to stay at home. Those restrictions have given most advertisers little incentive to market their products and services, reports AP.

It’s an incomplete picture because ad demand in most parts of the world wasn’t hit hard until late February and early March. That's when the coronavirus outbreak accelerated and governments imposed lockdowns to fight it.

Alphabet's first-quarter revenue increased 13 per cent from the same time last year to $41.2 billion. While most companies would celebrate that kind of growth, it's a significant slowdown for Google, which has regularly generated quarterly revenue gains of 20 per cent to 25 per cent.

The company’s revenue growth hasn’t been this low since the summer of 2015. That was before Google created Alphabet as a new holding company for itself and a hodgepodge of more risky tech ventures.

The performance was still slightly better than revenue of $40.8 billion projected by analysts surveyed by FactSet Reearch.

Alphabet earned $6.8 billion during the quarter, a 2.0 per cent increase from last year. The company's stock climbed 3.0 per cent to $1,269.50 in extended trading.