Google Chrome’s Ad Blocker May Hurt Alphabet’s Revenue

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Google Chrome’s Ad Blocker May Hurt Alphabet’s Revenue

Google, a subsidiary of Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), wants to clean up the web. As part of its efforts, the world’s most popular search engine announced that it is adding an ad blocker to its Chrome web browser. The new app will automatically block certain ads by filtering ads that have been marked “unacceptable” by the Coalition for Better Ads, according to the search company.

Based on research involving more than 25,000 consumers, the Coalition for Better Ads has developed ads standards for desktop web and mobile web for North America and Europe.

This is a good news for the Internet users who already have access to different ad blocking software designed to block ads. However, this new app from Google won’t be a pleasant thing for publishers, who rely on ads to monetize their website as their online subscribers’ growth is dropping.

A report from Benzinga suggests that Google’s new ad blocking app could also impact earnings of the company’s parent, Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL). Alphabet generates 88% of its revenues from online advertising. Chrome is a popular web browser with nearly 60% of the web browsing market share, according to NetMarketShare. So, blocking certain ad types could have an impact on the company’s Google revenues.

YouTube, the popular video streaming service owned by Google, generates billions of dollars through video advertisement. The service displays ad types deemed unacceptable by the Coalition for Better Ads. Those ads include “prestitial ads, which appear on a timer before displaying the site’s content, and auto-playing video ads,” according to Benzinga.

This year, YouTube’s revenue is expected to be around $10 billion, according to analysts at Nomura. In 2015, analysts at Credit Suisse estimated that YouTube’s annual revenue could reach $16 billion by 2020, according to a report from Business Insider.

It’s interesting to see whether there will be a significant impact on Alphabet’s revenues due to Google Chrome ad blocker. We’ll able to provide you more information in the near future.