On Thursday, Google's parent Alphabet Inc's financial results for the April-June showed that its major source of revenue-ad sales- declined for the first time ever, in the company's two-decade history, as coronavirus induced economic fallout forced advertisers to cut on spending.
The American tech giant reported net income of $6.96 billion when compared to $9.95 billion in the same quarter a year ago. Its revenue after removing traffic-acquisition costs declined to $31.6 billion from $31.7 billion last year.
Ad sales revenue was $29.9 billion in the June-ended quarter, down 8.1 percent from the same period last year and still a major portion of its total revenue of $38.3 billion. The fall in revenue for advertising is a stark contrast to its rival Facebook Inc., which saw overall revenue growth of 11 percent in the quarter.
However, there were signs of versatility in the company's overall product line with YouTube ad revenue increase of 6 percent to $3.8 billion from $3.6 billion a year ago, while Google Cloud sales grew 43 percent to $3 billion from $2.1 billion.
The pandemic has been favourable for cloud services, which helps people work remotely, but with a looming recession, companies are hesitant to spend freely on new software and infrastructure.
In comparison, Amazon.com Inc.'s cloud unit, which is much bigger than Google's, grew 29 percent to $10.8 billion in the quarter.