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jbog

01/29/15 10:09 PM

#9615 RE: DewDiligence #9614

With a market cap of around $350 billion I don't think Googles business model has been spectacular. It is becoming outdated, but I have no doubt that Google will be able to navigate its way.
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DewDiligence

07/16/15 7:13 PM

#10370 RE: DewDiligence #9614

GOOG:

http://www.wsj.com/articles/googles-results-top-expectations-1437077741

The price of Google’s ads, measured in cost per click, fell 11% compared with a year earlier. That compares to a 7% year-over-year decline in the first quarter.

As previously noted (e.g. #msg-110386480), the relentless downward trend in revenue per click would seem to be a long-term problem for GOOG’s advertising business.
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DewDiligence

10/02/16 1:38 PM

#13397 RE: DewDiligence #9614

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.
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DewDiligence

07/25/17 11:31 AM

#15186 RE: DewDiligence #9614

GOOGL’s “traffic-acquisition” costs are rising faster than ad revenue; what are the long-term implications for the business model?

https://www.wsj.com/articles/traffic-costs-jam-up-google-1500935189

Google showed an unprecedented ability to generate economic activity out of its massive internet search engine. Paid clicks, which measure the frequency that Google users click on advertisements, surged 52% year over year. That is the biggest jump in at least seven years—notable considering the company’s advertising revenue base has grown nearly fourfold in that time.

But that growth comes with a cost—$5.1 billion in this case. That is what Google expended for the quarter in traffic acquisition costs, which was also a record high. More important, traffic acquisition costs, which rose 28% in the second quarter compared with last year, outpaced revenue growth…

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DewDiligence

10/26/22 5:00 PM

#26794 RE: DewDiligence #9614

(META)—This post from 2015 aged fairly well (IMO):

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=110386480

Revenue per click has been declining for some time and shows no sign of relenting. If this persists, even with ever-increasing click volume, revenue is eventually going to stagnate.

The above was in reference to GOOGL, but it applies just as well (if not better) to META.