Google's parent Alphabet saw its quarterly revenue down by 2% compared to last year, despite meeting expectations.
The company reported net income of $6.96bn compared with net income of $9.95 billion, in the year-ago quarter.
Revenue after removing traffic-acquisition costs declined to $31.6 billion from $31.7 billion in the year-ago period.
It was the first fall in 16 years but the decline was not as bad as expected as many advertisers remained loyal during the pandemic.
Alphabet Chief Financial Officer Ruth Porat told analysts on Tuesday that while users were searching more, they were looking up less commercial topics and advertisers were cutting spending.
“As of today, we anticipate the second quarter will be a difficult one for our advertising business,” Porat said.
Porat said search ad revenue had declined by a “mid-teens percentage” by the end of March compared with a year earlier.
Alphabet, Facebook, Apple and Amazon account for nearly a fifth of the S&P 500’s market value.
Nicole Perrin, eMarketer principal analyst, said: “Google ad revenues were down for the quarter, but all three parts of Google’s ad business outperformed our expectations for Q2, including a substantial beat for search revenues (down 10%) compared to our expectations of a 17% decline. We expected April to be the bottom of the digital ad market, with a return to growth in May and June, and these results suggest that acceleration was stronger than expected.”
