Declining Ad Revenue at Google Is a Warning for Investors

Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google is the biggest ad platform in the world, and the origin of almost all of the company's $1 trillion in market value.

Google has been an unquestionable juggernaut since its founding in 1998. But now the company -- or at least its U.S. ad revenue -- looks set to experience its first annual decline. According to data from eMarketer, the digital research firm, Google is expected to see U.S. ad revenue decline by 4% for the year, or 5% when including traffic acquisitions cost. That compares to a forecast of 5% growth in U.S. ad revenue for Facebook (NASDAQ: FB), and the research firm expects Amazon, the #3 digital advertiser, to see growth as well.

Google is particularly vulnerable to the coronavirus crisis because it counts on travel giants like Expedia and Booking Holdings for a substantial percentage of its revenue. Those companies have drastically pulled back on ad spending due to plunging travel demand, and even see long-term changes in ad spending on Google as the search giant becomes a direct competitor.

Continue reading

Source Fool.com