Alphabet Inc (Google) and Facebook Inc have recently released their quarterly revenue results, and it is clear that the two tech giants are doing quite well. Both of these companies make the vast majority of their money on advertisements, and combined they bring in more than 60% of all Internet ad revenue in the US (and more than half in the world).
The success these two companies are seeing has not been replicated by many other companies online today. Other major companies such as Twitter and Snap are struggling to keep their ad revenue growing, or even to minimize losses. It is cause for concern that Google and Facebook are going to crowd out other companies, and continue to be a duopoly in the industry.
With this news, the stock prices of both companies are going up significantly, though it might be a short-term spike. Some people wonder how long the ad revenue can continue to climb, and when the saturation point will occur.
Brian Wieser is the Senior Analyst at Pivotal Research and commented on this saying, “Digital advertising will soon be approaching a point of saturation, indicating that there are limits to growth which may not be fully accounted for by the investment community.”
Whatever the future holds, it is clear that these two companies are dominating the competition for now.