Alphabet's performance was poor compared with its main tech rivals such as Facebook, which reported record revenue growth to more than $15bn in the first quarter, and Amazon, which has recorded four straight quarters of record profits.
"We delivered robust growth led by mobile search, YouTube, and Cloud, with Alphabet revenues of $36.3 billion, up 17 percent versus a year ago", Alphabet Chief Financial Officer Ruth Porat said. The company's digital advertising franchise has grown into the third largest in the US, trailing only Google and Facebook, eMarketer estimates.
The growth was the slowest since 17 per cent in the first quarter of 2016 and compared with 26 per cent for the same quarter in 2018.
Alphabet's share price dropped almost 7% in after-hours trading.
Analysts had expected adjusted revenue of $30 billion, and earnings of $10.53 per share. The sluggish growth is a direct result of declining ad sales as Google faces competition from other quarters, namely Facebook and Amazon. Traffic acquisition costs (TAC) came in at $6.86 billion (22 percent of ad revenue), while analysts expected TAC of $7.26 billion.
The company reported $36.34 billion in revenue, most of it from Google's many-pronged advertising business.
First-time buyers on the Google Play Store grew 50%.
"Nearly half of ad budgets in the USA are still spent offline, 90 percent of commerce in the U.S.is offline, and we are focused on digital playing a big role in that", Porat said.
One reason for the less than stellar results is the €1.5bn ($1.7bn) fine assessed by the European Commission in March for antitrust violations related to Google's ad business.
Porat did call out Home hardware as a segment that has been performing better, and said that the company would have hardware announcements at its Google I/O developer conference next week. Google's Other revenues - which include the company's enterprise cloud, software, and data management products - were $5.45 billion.
Google had to pay €1.5bn (£1.3bn) after it was accused of abusing its market dominance by restricting third-party competitors from displaying search adverts between 2006 and 2016.
Other bets revenue: $US170 million, compared with $US150 million previous year.
"Other bets" showed an operating loss of $858 million, up from $571 million a year ago while revenues rose modestly to $170 million.
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