Former Facebook executive: Any company that relies on Google searches to raise revenue is in trouble

Chamath Palihapitiya, a former Facebook executive and current CEO of venture capital firm Social Capital, said that with Google’s core business, search advertising, expected to slow, The longer the company looks for its next core business, the greater the risk to participants in the ecosystem.

Former Facebook executive: Any company that relies on Google searches to raise revenue is in trouble

At this week’s Phocuswright conference, Mr Hapitia warned that time was running out for companies that relied on Google.

“The longer Google finds the second biggest business, the less satisfied it will be,” he said of the companies, adding that investors’ patience would diminish. “If your business is built on Google, your medium- and long-term prospects are bad, and performance turns into a loss, and you don’t realize that,” he says. “He thinks the only way these companies can win is to provide unique value, but they’re doing the opposite, becoming more like competitors and relying on Google to drive traffic.” That’s the way to do it.

The comments come as Alphabet, Google’s parent company, prepares to slow down its core digital advertising business. The company showed a slowdown in advertising revenue in the first quarter of 2019, with third-quarter profit slower than a year earlier.

Hapitia pointed to tourism, calling Google’s travel business “the canary in the coal mine” and citing data from Expedia and TriPadvisor. “The point is that they will make up the vast majority of the tourism industry’s profits, ” he said of Google. “

Shares in Expedia and TripAdvisor hit new lows for the year this month after both companies accused Google of favoring its own search results.

Brad Gerstner, chief executive of Altimeter Capital, said: “TripAdvisor is one of the biggest users using Google’s search engine, and as Google turns free search into paid search, it is the company that has lost the most stock value. “

Google did not immediately respond to a request for comment.

Add a Comment

Your email address will not be published. Required fields are marked *