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Google Ad Revenue Slide Hits Shares

KIMIHIRO HOSHINO/AFP/Getty Images(NEW YORK) – Google and Microsoft are out with disappointing second-quarter results.

Google shares dropped nearly 8 percent in pre-market trading after sales and profit missed Wall Street forecasts. Google reported a decline in growth for search ad revenues.

The firm is still facing a major challenge navigating the transition driving more online activity to smartphones and tablets. Because of small screen sizes, mobile devices fetch lower ad rates than on personal computers.

Google’s average ad rate fell by 6 percent compared to the same three month period last year ending in June. It marks the seventh consecutive quarter of falling ad prices.

Poor sales of Windows 8 software and the sliding PC market were behind disappointing results at Microsoft. The company booked a $900 million write-down for slashing the price of its Surface RT tablet. Microsoft shares fell 3 percent after the report was released.

Copyright 2013 ABC News Radio

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