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Google falls 7% because Big Tech stole its ads

Snacks / Tuesday, April 30, 2019

Off by a billion... Revenue growth for Google-parent Alphabet decelerated hard in the 1st quarter to its slowest pace since 2015. And the profit made off that $1B-less-than-expected revenue was also (you got it) less than expected. Shares tanked 7% after investors learned Google is ~~human~~ fallible.

"Hey Google: What is competition?"... It's Facebook, Twitter, Snapchat, and Amazon. All of them have surging advertising divisions and they're all bad for Google. Here's the ad growth scoreboard for Q1:

  • Snap: +39%
  • Amazon: +34%
  • Facebook: +26%
  • Twitter: +18%
  • Google: +15%
  • Perspective: In fairness, Google's ad biz is the largest of all these by far — 2x bigger than Facebook's, and 100x bigger than Snap's.

Google's monopoly game is over... For 15 years, its business model was to grow the internet (developed to developing nations, desktop to mobile), then reap more and more $$ off it with online ads. Now it's ad-dependent — Ads are 86% of its revenues. With today's real competition, Google needs to embrace a new skill or embrace less growth.

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