Google Faces Declining Ad Market Share

Google's dominance in the U.S. search advertising market, traditionally seen as untouchable, is projected to dip below 50% by 2025 due to rising competition from platforms like Amazon and TikTok. The Department of Justice is currently engaged in a bench trial alleging that Google monopolizes the advertising market, claiming it controls up to 91% of publisher ad servers, while Google contests this figure, arguing its share is only about 10% when considering all online display advertising. Amazon has been increasing its market share by using its e-commerce data to create targeted ads, while TikTok has introduced features that allow advertisers to target based on search queries, attracting younger demographics. Additionally, the AI startup Perplexity is set to introduce ads through AI-generated content, intensifying competition. As these challengers gain traction, Google is adapting by integrating ads into its AI-powered search summaries. The outcome of ongoing legal proceedings and shifting market dynamics may significantly impact Google's advertising revenues and stock performance.