Google parent company Alphabet Inc (NASDAQ:GOOG) shares saw the sharpest drop in four years after first quarter earnings failed to meet Wall Street forecasts and Google ad prices dipped.
In after hours trading, shares plummeted from $759.96 to lows of $711.21 when the group issued an earnings report after market close on Thursday.
Alphabet, the second largest company in the world by market capitalisation, lost more than 6% (around $32bn) from its market value.
Although the group saw revenue grow 17% in the period, it spent more money on experimental projects, engineers, data centres and YouTube shows, causing it to miss investor expectations.
Revenues rose to $20.26bn between January and March, from $17.26bn in the same period last year. Net income stood at $4.2bn, up from $3.5bn last year.
Google ad revenues surged 16% in the first quarter to $18bn as the number of ads, or paid clicks, jumped almost 30%, but the cost per click fell 9% in the period.
The report followed formal monopoly charges issued by the European Commission against Google over claims it abused the dominant market position of its Android operating system.
Last year, Google underwent a restructuring and created a new parent company, Alphabet.
Google kept its best known businesses, such as search, YouTube and Android.
Alphabet will run its newer entities such as the drone arm and research divisions.
The drop comes as a major blow for the search engine empire, which could see the group shifting its focus from search to high-speed internet and video broadcasting.
"We're thoughtfully pursuing big bets and building exciting new technologies, in Google and our other bets, that position us well for long-term growth,” said Alphabet chief financial officer Ruth Porat.
Revenues from its “other bets”, in which it classes everything aside from Google, more than doubled to $166mln, but there was an overall loss of $802mln.
Shares were yet to recover this morning, currently at $714.20 in after hours trading.