Google's parent company Alphabet has reported ad revenue of $65.52 billion in the fourth quarter ending December, about 11 per cent higher compared to $59.04 billion year-on-year.

Ad revenues include Google search revenue ($48 billion) and YouTube ad revenue ($9.2 billion), which indicates 12.7% gain in Search and 15.5% in YouTube ads.

The ad revenue was $700 million less than the analysts' predictions for the company and shares fell 6% in after-hours trading on Wall Street.

The tech major, however, beat predictions for overall revenue at $86.31bn compared to $85.36bn – up 13% year over year.

The Q4 figures indicate the economic headwinds and the impact on the growth engine of digital advertising.

Besides, the search engine giant has been seeing tough competition from other online platforms such as Facebook, Instagram, TikTok and Amazon.com.

Notably, Google is bringing a powerful AI suite Gemini to its ChatGPT rival Bard. It is also empowering advertisers with Gemini, ensuring a sustained flow of their ad investments to Google's search business.

However, AI-driven advertising may not pick up soon due to geopolitical and economic uncertainties, which could deter ad buyers. Meanwhile, the US has initiated investigations into Alpahbet's AI investments.