Google posted a significant sales growth slowdown following pandemic

Online advertising companies, including Google, have warned of a slowdown in advertisement demand amid recession fear and high inflation.

Google reported that sales from the company's core advertising business hit $56 billion during the three months ended on June 30. Though it marks an increase of 11.6% year-over-year, it is a significant slowdown in growth rate from the same quarter last year. In 2021 Google posted a nearly 69% increase in advertising revenue as it benefited in online advertising from a pandemic boom.

The company narrowly missed Wall Street analysts' expectations for profit and sales during the quarter. The company posted revenues of $69.7 billion during the quarter, an increase of 13% from the prior-year quarter, compared to the $69.9 billion analysts had projected. Wall Street estimates $17.3 billion, but the net income of Google fell to $16 billion, i.e., more than 13% year-over-year.

From economic issues, Google's Search advertising is often considered better insulated than other online ad formats. Still, the challenging macroeconomic environment may continue to weigh on Google's business in the upcoming quarters. Google earlier this month also said that it would slow the pace of hiring and rethink investments amid the economic uncertainty and market downturn for the remainder of this year.