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Google ad revenue drops amid coronavirus, first decline in a decade

Shawn M. Carter

Google’s advertising revenue took a hit when the new coronavirus started.

The tech company ad revenue will drop for the first time in more than a decade, according to recent data from the research firm eMarketer, which said the decline parallels with the slowdown of travel-related ads placed by airlines, hotels and other industries as vacationers mostly stay home, or local, to mitigate the spread of the novel virus.

U.S. ad revenue is projected to fall 5.3 percent to $39.6 billion by the end of the year, the data pointed out, cutting the tech company’s market share from 31.6 percent to 29.4 percent.

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Nicole Perrin, a principal analyst at eMarketer said e-commerce spending is down, highlighting that Amazon pulled ads from Google earlier in the pandemic while it struggled to meet customer demand for products. The research firm started tracking Google in 2008.

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The decline in ad revenue comes as Google’s stock is trending upward.

Shares of the company were up almost 2 percent Monday and have shot up 30 percent during the year, including 37 percent in the last three months. Parent company Alphabet reported adjusted earnings of $9.87 per share with revenue just over $41 billion for the first quarter of 2020.

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To be sure, advertising revenue for Amazon, as well as Facebook, have also slowed in the outbreak, though neither are forecast to drop into the red. Amazon’s share of the digital ad market will rise from 7.8 percent to 9.5 percent, with Facebook going from 22.7 percent to 23.4 percent.

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