Google parent Alphabet Inc on Tuesday posted quarterly sales close to Wall Street targets, sending shares up on relief that the world's biggest seller of online advertising had avoided the deep disappointment of rivals including Snap.

Sales from Google's search ad business actually topped expectations, while revenue from YouTube ads, cloud computing and Alphabet's 'other bets' unit all came in lower than anticipated, according to data from FactSet and Refinitiv.  

Shares of Alphabet were up three percent in after-hours trade after rising to as much as 4.3 percent following the results bringing the price to $110 per share.

'Despite the underwhelming quarter, expectations were so low that investors blew a sigh of relief,' said Jesse Cohen, senior threetwentymain analyst at Investing.com.

Alphabet reported second-quarter revenue of $69.69 billion, 13 percent higher than the year-ago period, and nearly in line with the average expectation of $69.88 billion among investment researchers tracked by Refinitiv.

The company also barely missed sales expectations in the first quarter. It last missed estimates in consecutive quarters in 2015.

Earlier in July, the company's CEO Sundar Pichai said that Google would slow hiring for the rest of the year while asking employees to be 'more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we've shown on sunnier days,' according to  

In the second quarter in 2021, the company had just over 144,000 employees. As of right now, the company has over 174,000 employees, reports  

An SEC filing from January shows that four Google's executives saw their base pay rise from $650,000 to $1 million following a fifth straight quarter of record profits. 

Rising wages as well as rising prices of fuel and other items have forced some ad buyers this year to pare marketing, including even ads on internet services such as Google that served as an essential link to consumers during pandemic lockdowns.

Last week, Snap Inc and Twitter Inc posted disappointing quarterly results, heightening concerns about the slowdown in ad spending. Snap shares plunged 25 percent following its results.

During the quarter, Twitter lost $270 million with company referencing uncertainty over Elon Musk's acquisition as one of the reasons for the shortfall.  

Big U.S. multinationals including Alphabet also are increasingly bringing in less cash when converting foreign revenue because of the strong dollar.

Alphabet said the currency affected sales growth by 3.7%, and that sales would have been close to $72 billion if not for currency swings. About 55 percent of the company's sales come from outside the United States.

The currency impact will be even greater in the third quarter, Alphabet chief financial officer Ruth Porat told reporters, according to During the interview, Porat made reference to 'uncertainty in the global market.' 

Porat told the network: 'Going forward, the very strong revenue performance last year continues to create tough comps that will weigh on year on year growth rates of advertising revenues for the remainder of the year.' 

Google's ad business accounted for 81 percent of the quarterly revenue, with search ads generating $40.69 billion in sales, beating FactSet estimates of $40.15 billion.

The company's chief business officer Philipp Schindler told CNBC that travel and retail searches boosted the company's growth.  

'Google is relatively well positioned to weather the rough waters that lie ahead,' Insider Intelligence analyst Evelyn Mitchell said.

In recent years, ad spending cuts have hurt social media companies more than Google. It brings in revenue through a greater variety of functions in the ad market, and search ads can be easier for customers to generate since they often include just text.

Clients sometimes prioritize search ads given that they can drive better returns because the marketing is typically directed at people actively searching for related items.

Sales from Google Cloud of $6.3 billion missed analysts' target of $6.4 billion and YouTube ads also fell short, coming in at $7.3 billion against estimates of $7.5 billion, a rise of five percent from the first quarter, according to FactSet data. 

One of Google's competitors in the cloud division, Microsoft with their Azure product, announced on Tuesday that sales were up 40 percent from the first quarter.  

Between the first and second quarters in 2021, YouTube ad sales rose a whopping 84 percent.  

Overall profit was $16 billion, or $1.21 per share, compared with the average estimate of $1.29 per share. Alphabet's profit tends to be unpredictable due to sporadic gains or losses - at least on paper - in the stakes it holds in many startups.

Investors look more closely at ratios of costs to sales.

With investors accustomed to gross profit margins as high as 60%, Google, like many of its peers, recently began slowing hiring in some units to better manage expenses.

But at the same time, Alphabet is moving forward with expanding its cloud computing footprint, building out new offices and bringing its Google Fiber internet service to new communities.

Other factors are motivating concerns about a potential sales slowdown. Amid scrutiny from antitrust regulators on five continents, Google is taking a smaller cut from sales of apps developed by outside software makers.

Google suspended sales in Russia due to the war in Ukraine, and YouTube's ad revenue has fluctuated as its options for advertisers grow and wane in popularity.

Still, within the $602 billion global online ad industry, Google is expected to maintain market share of 29 percent, or the biggest share for the 12th straight year, according to Insider Intelligence.

Earlier this month, Google lost out on a major new sales partner when Netflix Inc said it had chosen Microsoft Corp's ad technology to help with its first foray into placing ads on its streaming video service.

Alphabet shares have fallen over 27 percent so far this year, more than the overall S&P 500 index. Alphabet split its stock 20-for-1 on July 15, briefly helping boost shares before the results from Snap and Twitter sent them falling.

Meta Platforms Inc, which through Facebook and Instagram owns the second-biggest online advertising service, reports earnings on Wednesday. Its shares rose 1.6 percent on Tuesday after Alphabet's results.

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