San Francisco (AFP) - Last summer, Alphabet , Google's parent company, reported its weakest revenue growth since 2013, excluding the start of the pandemic, in a strong indication of the growing difficulty for the digital advertising giants in the face of inflation and competition.

The US giant group announced on Tuesday revenues of $ 69.1 billion in the third quarter, up 6% year-on-year.

Its net profit was $14 billion, far below expectations.

Following the announcement of the results, Alphabet's stock plunged more than 6% during electronic trading after the closing of the New York Stock Exchange.

Between July and September, YouTube ad revenue fell 2% to $7 billion, after the market had expected a slight uptick.

"Google's faltering is a bad sign for digital advertising in general," said Evelyn Mitchell, an analyst at Insider Intelligence, adding, "This disappointing quarter for Google heralds tough times if macroeconomic conditions continue to deteriorate."

She noted that "this is the first time that YouTube ad revenue has decreased since the company began publishing them separately in late 2019, largely due to competition from streaming platforms and short video services" on mobile applications such as TikTok.

Alphabet's vice president and network sales director Philip Schindler acknowledged during a conference call that some advertisers, particularly financial services companies, had "pulled out" of the platform.

The world leader in digital advertising is suffering from cuts to brands' budgets due to inflation and rising interest rates. It is also paying the price for comparison with its results in 2021, when pandemic-related health restrictions greatly boosted online activities.

The rapid rise of TikTok has also undermined the dominance of Google and Meta (owner of Facebook and Instagram) in this market. In 2021, the entertainment app outperformed Google in the competition for the title of the most popular website in the world, according to the online service provider Cloudfire.

Major platforms have tried to copy the format of videos on TikTok (through “Reels” on Instagram and “Shorts” on YouTube), but they are having difficulty converting their investments into profits.

“We have gone through exceptional periods of growth, but there have also been times that, in my opinion, give the company time to improve its business, to ensure that we are ready for the next decade of growth,” said Sundar Pichai, president of the giant Google Group, which is headquartered in Mountain View. “We are in one of those.” times".

Alphabet has slowed its hiring pace, after accelerating it significantly during the pandemic. The company had approximately 187,000 employees as of September 30, an increase of about 13,000 compared to the end of June.

"We will continue to hire new people to perform important roles, including especially engineers," said the company's chief financial officer, Ruth Porat, while several giant technology companies laid off employees this year, including Netflix, Twitter and Snap.

A month ago, Google announced the closure of its online video game platform Stadia, three years after it was launched with great fanfare, this service that allows playing without a console or computer, through cloud computing services.

At the same time, the company reaffirmed its smartphone ambitions with the launch of the Pixel 7. Between July 2021 and June 2022, about 6.2 million phones were sold to the brand, an increase of 129% year-on-year, according to Canalys figures.

Also, the cloud computing service "Google Cloud" is performing well, as it continued to grow with quarterly revenues of $6.9 billion, up from $5 billion in the same period last year.

However, the share of "Pixel" phones in the global market is still small, while "Google Cloud" ranks third among cloud service providers, behind Amazon ("AWS") and Microsoft ("Azure"), which accounted for 55% of this market in August, according to Canalys.

Precision-targeted online advertising remains widely the focus of Alphabet's business, to the chagrin of authorities and many consumers.

Google has recently added a new tool that gives Internet users more control over the content of ads that appear while browsing websites, hoping to meet the requirements of its users, while ads on other services, including TikTok and Instagram, blend in more smoothly with the contents.