"Antitrust regulations endanger fundamental operations: The US DOJ won cases in 2024-2025 concerning ad tech and search monopolies, requiring remedies such as terminating exclusive contracts and data sharing. EU penalties include €2.4 billion (Sep 2024) and $3.5 billion (Sep 2025) for violations in ad tech. The DMA resulted in a 30% decrease in Google Search traffic for tourism within the EU. Alphabet successfully appealed a €1.49 billion EU fine in Sep 2024."
"AI Summaries, introduced in May 2024, promote "zero-click searches," diminishing publisher traffic by 34.5% to 54.6% and reducing organic search CTRs from 7.3% to 2.6% (Mar 2025). This disrupts the $175 billion annual search ad revenue (2023). Despite Google's Gemini achieving 82 million monthly active users in Q2 2025 and Search revenue increasing 13% to $76.5 billion in Q3 2024, AI's emphasis on direct answers diminishes clicks."
"Escalating rivalry from competitors: Amazon's ad revenue reached $56.2 billion in 2024 with a $69 billion run rate (Q4 2024). TikTok's worldwide video revenue hit $63.3 billion in 2024, nearly doubling YouTube's $33.3 billion. Google Cloud, possessing 10-13% of market share (2024), trails Microsoft Azure (20-25%). Google Cloud revenue surged by 35% to $11.4 billion (Q3 2024), and YouTube ad revenue stood at $8.92 billion."
Alphabet faces mounting risks from regulatory actions, AI-driven changes to search behavior, and intensifying competition. US Department of Justice and EU penalties have forced remedial measures, including ending exclusive contracts and data sharing, and fines totaled billions. AI Summaries introduced in May 2024 drive zero-click searches, reducing publisher traffic by 34.5%–54.6% and lowering organic CTRs from 7.3% to 2.6%, which threatens the $175 billion annual search ad market. Competitors such as Amazon, TikTok, and Microsoft are expanding ad and cloud revenues, while Google Cloud and YouTube continue to grow but trail rivals. These factors increase the potential for sudden, severe stock declines.
Read at Forbes
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