Google surprise setback as UK sales start to slow

Google has suffered a surprise slowdown in the UK, with revenues falling for the first time in eight quarters.

Sales dropped nearly 5 per cent to $1.32bn (£868m) in the three months to June compared with $1.39bn in the first quarter of this year.

Stripping out foreign exchange and other differences, Google revenues fell 3 per cent quarter on quarter in Britain.

Google’s UK turnover rose 15 per cent year on year, markedly slower than the 23 per cent jump seen in the same quarter of 2012 and 19 per cent in 2011.

Patrick Pichette, the chief financial officer, blamed “a warm spring and a tough year-on-year comparison” for the UK slowdown. The web giant has been under fire over its corporate tax avoidance in Britain in recent months, but there has been no evidence that the row has deterred consumers or advertisers.

Britain remains Google’s biggest market outside America and generated 10 per cent of global revenues, down from 11 per cent a year ago.

The weaker UK performance was part of a wider trend as Google disappointed Wall Street by missing expectations.

Group revenues rose 1 per cent quarter on quarter to $14.11bn, a 19 per cent increase year on year.

Google suffered from a drop in the amount of money it received from advertisers each time a user clicked on an ad, by an average 2 per cent quarter on quarter and 6 per cent on a year ago.