As the parent and child company has grown?
They have run short of things to eat to make them bigger….
Happens all the time to mammoth companies….
Apple and Amazon are experiencing the same thing….
For the last three years, Google’s parent company, Alphabet, has defied what financial analysts call the law of large numbers.
That streak may be coming to an end. On Monday, Alphabet said revenue in its most recent quarter increased 17 percent from the same period last year, to $36.3 billion. That was about $1 billion short of Wall Street’s expectations.
The Silicon Valley company’s revenue had grown more than 20 percent every quarter since 2016.
The law of large numbers is simple: As a company gets bigger, it becomes difficult to find new ways to make money and maintain rapid growth. The issue has dogged other big tech companies like Apple in recent years.
Alphabet explained the revenue shortfall with a very big-company answer. It said the strong United States dollar dented revenue by $1.2 billion. Google executives rattled off a long list of currencies weakening against the dollar, including the euro, the British pound, Brazilian real and Indian rupee. The company said it expected foreign currency to be an issue again in the current quarter.
“I guess I’ll beat the dead horse on the revenue deceleration,” said Ross Sandler, an analyst at Barclays who follows the company. He asked whether there was an issue in Asia, where revenue grew 1 percent from the previous quarter.
But Ms. Porat and Mr. Pichai did not offer much detail. Alphabet does not employ a quarter-by-quarter strategy, they said, and it invests for the long term.
Alphabet said clicks on advertisements on sites like Google and YouTube grew 39 percent — a notch below increases of 50 to 60 percent in recent quarters. Ms. Porat said the rate at which consumers are clicking on YouTube ads is not increasing as fast as before….