Google parent Alphabet posted first-quarter earnings that missed analyst expectations as the search giant's revenue came in softer than anticipated.
For the quarter ended March 31, Alphabet reported $68 billion in sales, slightly below the $68.1 billion forecast by analysts surveyed by Yahoo Finance. Earnings per share totaled $24.62, below the $25.94 forecast.
The weaker than expected results come as Google tries to diversify its revenue, in part to address its reliance on search. The company controls more than 90% of the search market, using it to generate revenue by selling advertising against keywords and search results.
As part of its effort to diversify revenue, Google is expanding its cloud computing services, which compete with Amazon's AWS and Microsoft's Azure. Revenue for Google's cloud rose more than 40% year over year to $5.82 billion. Losses at the unit narrowed.
Still, advertising drives Google's earnings. A softening global economy likely weakened the advertising market, weighing on overall revenue.
Google also said its board had authorized a share buyback, pledging to repurchase an additional $70 billion in shares.
The company's stock fell 2.8% in after-hours trading to $2,324.00
On a call with analysts, CFO Ruth Porat said the company had expanded aggressively over the quarter with investments in data centers and adding employees. The company employed almost 24,000 more people at the end of the first quarter than it did a year earlier. The company also spent on sales and marketing.
Executives pointed analysts to YouTube Shorts, a TikTok competitor that launched last year. CEO Sundar Pichai said YouTube shorts were generating 30 billion daily views. The company is encouraging creators to make videos for the platform with a $100 million fund. Still, TikTok is the heavyweight in the short-form video market, a status it is unlikely to cede anytime soon.
Google, along with many companies, pulled out of Russia after its invasion of neighboring Ukraine. Porat said about 1% of Google's revenue came from Russia last year.