Google travel ad revenue may be hit by Covid-19, analyst says

The coronavirus is slowing economic activity and ad budgets are often one of the first expenses to be cut when companies tighten their belts. Alphabet Inc’s Google relies on millions of businesses, large and small, to buy ads on its search engine and on YouTube to keep revenue growing. — AFP

Google’s massive travel advertising business could be hurt because the coronavirus outbreak is disrupting travel plans.

Needham & Co analyst Laura Martin estimated spending on travel search ads will drop US$1bil (RM4.18bil) in the first quarter and US$3bil (RM12.55bil) in the second quarter. Most of that money would have been spent on Google, which dominates the space. Travel ads make up 10% of all search ads and accounted for about US$10.7bil (RM44.76bil) of Google’s US$98bil (RM410.03bil) search revenue in 2019, Martin wrote in a Thursday note to clients.