Why Google Could See a Decline in Ad Revenue This Year
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) may be facing an unprecedented event this year. Its Google subsidiary could see its advertising revenue decline due to the impact of the novel coronavirus on its biggest advertisers. eMarketer expects its U.S. revenue to drop 5.3% this year, the first yearly slump in Google ad spend since the research firm started modeling its results in 2008.
Meanwhile, the rest of digital advertising tri-opoly -- Facebook (NASDAQ: FB) and Amazon (NASDAQ: AMZN) -- will continue to grow ad revenue, albeit at a slower rate than eMarketer modeled before the pandemic hit.
The biggest culprit behind Google's potential decline in revenue is lower spending in the travel industry. Pullback from other big advertisers, including Amazon, has had an impact as well. The question FAANG stock investors need to ask is whether the pullback in Google ad spending is temporary or more permanent.
Source Fool.com
