Tag Archives: Barry Diller

Google Q1 earns revenue because travel websites cut advertising spending | Instant News

When Alphabet reports first-quarter earnings Tuesday afternoon, accidents caused by coronaviruses in tourism and travel will likely weigh heavily on results. Booking Holdings, parent of Booking.com, Priceline and Kayak, will cut its ad spending on Google from around $ 4 billion in 2019 to $ 1 billion to $ 2 billion this year, according to Mark Mahaney, an analyst at RBC Capital Markets. “It really depends on when the COVID lockdown ends,” he said in an email to CNBC. Travelers use the Booking site to book flights, hotels, resorts, vacation homes and rental cars. Expo Chairman Barry Diller told CNBC “Squawk Box” earlier this month that his online travel agency, which also promotes Google a lot, will spend less than $ 1 billion on advertising this year, down from $ 5 billion in 2019. Airbnb month then suspend marketing because of attempting to drop holiday home visits. In a note to clients on April 26, Stifel analysts said they expected “short-term economic impact” in the Alphabet, highlighting Google and YouTube “special exposure to travel, media & entertainment, retail, finance, and, automotive verticals.” The company said search expenses for travel fell 50% from before the pandemic struck. Despite having many experimental and new businesses that generate publicity, Alphabet relies heavily on advertising for actual revenue. Google is the only financial material company under the Alphabet umbrella, which generated more than 99% of its revenue last year, while other Alphabet companies, such as Verily (health technology) and Waymo (self-driving cars) are long-term investments. Within Google alone, 84% of its revenue last year came from advertising, with the rest coming from cloud computing, hardware, and other businesses. Now, Google’s dominant advertising business faces the biggest test since the Great Recession. Stocks have fallen 17% since closing at a record on February 19, a steeper decline than the S&P 500 during that stretch and the biggest drop among the five most valuable US tech companies. With consumers in many of U.S.’s largest markets locked, investors are left to ponder how long before airlines, hotels, shipping companies, and concert venues return to business and promote their products. Online travel agents are big spenders on Google because so many travelers book trips after going to search engines and typing in questions like “flights to Paris,” “hotels in Manhattan” or “rental cars in Las Vegas.” These keywords are expensive, but Booking, Expedia, and others pay for it because they make a successful booking. Orders have long been one of Google’s biggest single customers. The company spent $ 4.4 billion on marketing performance in 2019 and the same amount in 2018, accounting for almost 90% of its marketing budget each year. While Booking doesn’t reveal how much money goes into Google advertising, the company said in its latest annual report that, “We use Google to generate the most traffic to our platform, and, to a lesser extent, we use search and meta services other search to generate traffic to our platform, mainly through pay-per-click marketing campaigns. “A spokesman for Booking declined to comment and said the company would not provide further information until announcing revenue next month. Google also declined to comment. Google sees a problem on the horizon and implements cost-cutting measures. The company cut its marketing budget by half by the second half of this year, CNBC reported last week after seeing internal material. There is little doubt that the second quarter will be difficult for Google, following the same path as the last six weeks of the first quarter. Over the past half year, major conferences and festivals have been canceled, leading many analysts to conclude that Google and its $ 135 billion annual advertising business must face the corona virus for at least the rest of 2020. “While we expect a shift in market share to digital advertising, overall advertising spending will reflect the possibility of a contraction in the economy caused by a pandemic,” Wedbush analysts said in a report last week. “And we hope the Alphabet will suffer from slower growth for equilibrium this year.” PLEASE NOTE: Barry Diller about the economic impact of coronavirus, industry bailouts and more.

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