Besides disappointing investors, the report was an embarrassment for Google. Near the top of the draft, the report said, "PENDING LARRY QUOTE," apparently a place to insert a quote from Larry Page, one of Google's founders.
The earnings report said that Google made about 15 percent less than a year earlier each time a user clicks on an online ad. That is the fourth straight quarter of erosion in Google's ad prices.
It is a warning sign for Facebook, which is trying to figure out how to make money off advertising on mobile devices.
Facebook stock declined 90 cents, or 4.6 percent, at $18.98, with most of the loss coming after Google's earnings report. The company went public in May at $38, but it has fallen as low as $17.55, in part because of investor concerns about ads.
"Google and Facebook are very reliant on online ads," said Scott Kessler, head of technology sector equity research at S&P Capital IQ, a research firm. "So if Google's results indicate a lack of demand and growth, that's obviously a worry for Facebook."
Google is the third-largest component in the Nasdaq composite, behind Apple and Microsoft. The Nasdaq finished down 31.25 points at 3,072.87.
The broader market fared better: The Dow Jones industrial average closed down 8.06 points, or 0.06 percent, at 13,549.94. The Standard & Poor's 500 index fell 3.57 points, or 0.2 percent, to 1,457.34.
The broader market is "waiting for a clear catalyst," said Quincy Krosby, market strategist at Prudential Financial. What investors most want, she said, is a sense of direction about earnings and the economy.
"We basically know what happened in the last quarter," Krosby said. "What we're looking for is what's next: Are we turning a corner? Will demand pick up at the end of the year?"
Analysts expect S&P 500 companies to say that overall earnings shrank in the third quarter compared with a year ago, according to S&P Capital IQ. That would be the first drop in exactly three years.