As advertisers reined in spending and prepared for a future recession, Google's corporate parent's summer revenue growth slowed to its sluggishest pace since the pandemic rattled the economy more than two years ago.

On Tuesday, Alphabet Inc., which also owns a number of smaller technology firms in addition to Google, reported revenue of $69.1 billion for the quarter ending in September. 

It was the first quarter since April through June of 2020 that Alphabet's year-over-year quarterly sales increased by less than 10%. Due of the economic unpredictability in the early months of the epidemic, the advertisers who were responsible for the majority of its earnings at the time drew back.

Even more drastically than Alphabet's overall revenue, Google's ad sales declined. $54.5 billion was the total amount of advertising income, only 2.5% more than at this time last year. Another indication of tougher times is that YouTube's quarterly ad sales fell 2% from the previous quarter, the first revenue decline for the video platform since Google started revealing its results in 2019.

The decline in revenue also had a detrimental effect on Alphabet's profitability. The Mountain View, California-based company earned $1.06 per share, or $13.9 billion in revenue, down 27% from the corresponding quarter in 2017. Revenue and earnings per share fell short of what analysts surveyed by FactSet had predicted.

Following the release of the results, Alphabet's shares dropped by roughly 7% in extended trade. This year, the stock price has dropped more than 30%, wiping off approximately $600 billion in shareholder equity.

Online advertising spending is obviously slowing more than we anticipated, according to Edward Jones analyst David Heger. The upcoming quarters appear to be going to be difficult sledding.

Alphabet CEO Sundar Pichai described the scenario as 'uncertain' in a conference call with analysts and added, 'It is a point where you take the opportunity to optimise the company to make sure we are set up for the next decade of growth ahead.'

As economic restrictions were relaxed last year and the economy was stimulated by government action, Google's money-making machine, fueled by its market-dominating search engine, roared back, propelling Alphabet to a 41% surge in revenue and pushing its stock price to new highs.

However, the economy has recently sputtered and is now in danger of entering a recession as central bankers progressively boost interest rates to confront the highest inflation rates in more than 40 years. Due to the fact that many households have already cut back on discretionary spending and tightened their budgets, marketers are now spending less money advertising their products and services.