The Rising Influence of Rising Affluence

[DewDiligence]

Re: GOOGL/FB online advertising

This Barron’s piece echoes concerns I’ve expressed regarding the online-advertising business:

http://www.barrons.com/articles/how-alphabet-and-facebook-could-lose-out-in-online-ads-1475298190

…even with a giant audience online, you can lose the war for ad dollars. Just look at Yahoo! (YHOO), which still has more than a billion active users, but which has had uneven ad revenue growth for years.

Such a scenario was suggested last week by Wedbush’s James Dix. He cut his rating on Alphabet to the equivalent of a Sell. He doesn’t think people will stop searching on Google, he just thinks those searches will be less and less valuable to advertisers.

… more and more, Google’s site is a place where people see come-ons from the highest bidder in their searches, as opposed to seeing only the most relevant answers for a given query. That prompts him to ask, “Is Google really a search engine supported by advertising, or an advertising engine where people engage in some search activity?”

My specific concern, mentioned in #msg-110386480, is that the cash value of an online-ad click has been monotonically declining.