By Miles Kruppa
Google reported accelerated revenue growth thanks to strong results in its cloud-computing division, boosting the company's fortunes during a costly push into artificial intelligence.
Parent company Alphabet recorded total revenue of $88.3 billion in the third quarter, an increase of 15% from the same period last year. That compared with an increase of 14% in the second quarter.
However, Google's search engine and YouTube video platform both reported slowing revenue growth for a second straight quarter, indicating troubles in the company's advertising business.
Alphabet reported total ad sales of $65.9 billion in the third quarter, an increase of 10.4% from the same period last year. That compared to 11.1% growth in the second quarter.
Google and other tech giants including Microsoft, Amazon and Meta Platforms have significantly ramped up AI spending over the past few years as part of the boom in artificial intelligence investment.
Alphabet's shares have fallen about 11% from a peak in July as the company deals with losses in multiple antitrust lawsuits and ongoing concerns about its core business being upended by AI chatbots. Google's search ads business is expected to fall below 50% market share next year due to growing competition from Amazon.com and others, according to Emarketer data.
E-commerce companies Shein and Temu, two of Google's largest advertisers, slowed their U.S. spending in the three months ending September compared with the same period last year, according to Sensor Tower data. Their spending provided a boost to Google and Meta Platforms' businesses going back to early last year.
Google reshuffled leadership in its core moneymaking business this month, appointing company veteran Nick Fox to oversee products including the search engine, advertising and map tools. Prabhakar Raghavan, who previously held the position, moved to a role working with CEO Sundar Pichai on technical matters.
Write to Miles Kruppa at miles.kruppa@wsj.com
(END) Dow Jones Newswires
October 29, 2024 16:21 ET (20:21 GMT)
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