Have Google and Facebook Reached a Tipping Point?
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Facebook (NASDAQ: FB) are two of the most valuable companies in the world.
Born in the digital age, these two businesses now regularly generate huge profits for one reason: advertising. Alphabet's Google dominates search, while Facebook is the clear leader in social media. Both companies provide tremendous value for advertisers, which has essentially given them a duopoly in the industry, with fat profit margins to boot.
While these two tech giants are perceived as growth stocks, advertising isn't a limitless growth market. Overall, advertising is growing by just 4%-5% a year in the U.S., meaning that these two business can't grow at their current rates forever just on advertising alone. In fact, cracks in Google and Facebook's growth may already be showing.
Source Fool.com
