Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google is forecast to see a decline in U.S. advertising this year due to a halt in travel amid the COVID-19 pandemic. 

According to a new report by research firm eMarketer covered by the media, Google is poised to see U.S. advertising revenue fall 5.3% in 2020, marking the first time it declined year over year since the research firm began tracking Google's ad sales in 2008. Google is faring better than the overall U.S. advertising market, which eMarketer predicts will see a 7% decline year over year in 2020. For all of 2020, eMarketer expects the tech stock to have U.S. ad revenue of $39.58 billion. For 2019, Google weighed in with ad sales of $41.8 billion, CNBC reported. 

Google's advertising business in the U.S. is getting hit hard given its reliance on the travel industry. With travel coming to a halt earlier in the year amid the pandemic and with people still wary about boarding planes, advertisers have been reining in their spending. YouTube ad sales are expected to continue to grow this year, but it won't be enough to offset the overall decline in ad spending, noted eMarketer. 

"The biggest single culprit here is the travel industry, which has been both hardest hit by the pandemic generally, and has concentrated spending on Google in the past," Nicole Perrin, principal analyst at eMarketer, told The Wall Street Journal.  

At the same time that Google is experiencing a decline in ad sales, its rivals Facebook (NASDAQ: FB) and Amazon.com (NASDAQ: AMZN) are getting a bigger piece of the pie. eMarketer expects both companies to see an uptick in ad sales this year despite the pandemic. Looking out to 2021, eMarketer does expect Google's U.S. ads to pick up again, growing more than 20%. In 2022, it predicts ad sales will be up 11.8%, noted CNBC. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Online advertising has been dominated by Facebook (NASDAQ: FB) and  Alphabet's  (NASDAQ: GOOG) (NASDAQ: GOOGL) Google for several years now, but there are hints that Amazon (NASDAQ: AMZN) is beginning to get in on the revenue bounty. That should have the current duopoly worried, even if it might be a while still before Amazon's efforts become a real threat. Let's take a closer look at the situation and where it might be leading.

Amazon grabs a piece of the online advertising pie

For years, advertisers have been throwing billions of advertising dollars at Facebook and Google to market products and services on their various online platforms. In Facebook's fourth quarter alone, revenue from advertising on its various apps totalled $20.7 billion. Meanwhile, ad sales on Google's various apps and services totalled $37.9 billion for its fourth quarter.

Then there's Amazon. For its fourth quarter, it posted a record $4.8 billion in revenue for its "other" segment (advertising revenue makes up the bulk of this segment's revenue). While its ad sales are just a fraction of what Facebook and Google generate, Amazon's ad business is growing at a faster rate. Ad sales increased by 41% in the fourth quarter compared with 25% and 20% for Facebook and Google, respectively. Revenue from advertising even outgrew Amazon's overall business, which reported 21% growth in the fourth quarter. 

By 2023, Juniper Research predicts Amazon will have yearly advertising revenue of $40 billion (up from almost $10 billion in 2019) and have a 7.7% market share. That suggests a 400% growth rate over the next four years. The overall digital advertising market size by 2023 is projected to be $520 billion, according to Juniper. In comparison, Google is projected to have $230 billion in advertising revenue by 2023 (a 44.2% market share). Juniper predicts Amazon will use its retail data and investment in artificial intelligence and machine learning to provide advertisers with an efficient platform to target customers. The company thinks these efforts will lure advertisers away from Facebook and Google. 

Boosting ad sales a 2020 focus for Amazon 

Amazon has said it is focusing on growing its advertising business, noting on its fourth-quarter earnings conference call that it is working to lure more brands to its marketplace by developing tools and products that give those companies more reasons to run ads. Dave Fildes, an investor relations executive at Amazon, pointed to the Stores initiative, which enables brands to customize and curate a multipage store, and the Posts initiative, which includes curated feeds that feature the brands' content. "I think broadly with advertising, so much of this is about ... developing great relationships with these sorts of advertisers," Fildes said during the fourth-quarter conference call. 

Investors hanging their hats on Amazon's stock soaring on ad sales will have to be patient. Facebook and Google won't give up their dominating in that area anytime soon. But as investors and analysts pay more attention to that portion of the business and the potential it offers, it could provide a new reason for excitement about the stock (and spark share-price growth). Amazon does seem to be taking a long view, building relationships with the brands instead of selling them ad space. Posts and Stores aren't specifically designed to boost advertising, but they could have that effect. Brands could also increase ad spending to drive Amazon's customers to their Stores and to get noticed on Posts. All of that will take time to play out. 

What could give Amazon (and thus its stock) a more immediate lift is its Amazon Sponsored Products ads, which let brands create their own ads on Amazon. Amazon charges the companies only when customers click on the ads. Spending on Amazon Sponsored Product ads jumped 63% year over year in 2019, marking a 15% increase in spending from advertisers. Amazon Sponsored Product ads accounted for most of the advertising dollars spent with Amazon in the fourth quarter. 

Amazon eyes ads on TV apps 

A possibly huge driver of future ad sales is Amazon's initiatives to sell ads on streaming TV platforms outside of Fire TV. As it stands, Amazon uses its data to target the ads placed on Fire TV as well as its IMDb TV platform, and now it wants to offer that targeted ad data to others. Amazon is reportedly talking to streaming TV app owners and various cable networks about letting it sell ad inventory on their systems. Advertisers would get access to its targeting tools on these platforms only by purchasing ads through Amazon. 

Amazon already does that for various online publishers, so offering it to TV app owners is a logical next step, and a beneficial one, too. Everyone has difficulty filling ad space and would welcome another source. For Amazon, it means another way to boost its advertising revenue.

While Amazon ad sales don't get the attention that other more forward-facing parts of the company do, this segment has the potential for profitability and offers another way for this tech giant to diversify and continue to drive double-digit revenue growth. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Should Amazon's ad business worry Facebook and Google? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Donna Fuscaldo has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

With one of its manufacturing hubs situated at the epicenter of the coronavirus outbreak, Apple (NASDAQ: AAPL)'s stock has been under pressure recently as analysts and investors ring the alarm bells about the impact outbreak could have on its iPhone sales. 

Many of Apple's gadgets are assembled in Shenzhen and Hengyang, China, but they are shipped from Wuhan, China, where the virus is believed to have originated. With most of the city in quarantine and with the outbreak spreading around the world, worries are growing that it could affect iPhone shipments. As of this writing, there are more than 28,000 cases of coronavirus just in China with 566 deaths worldwide.

TF Securities analyst Ming-Chi Kuo, who has made accurate calls on Apple's manufacturing and shipments in the past, was the most recent analyst to express concern about the company's financial situation. In a note to clients this past weekend, the analyst warned that during the current quarter Apple could see shipments down 10% because of the coronavirus. 

Kuo now expects Apple to ship between 36 million and 40 million iPhones during the current fiscal second quarter, compared to the 38 million Kuo estimates Apple shipped in last year's first quarter. As for the fiscal third quarter, Kuo isn't sure how shipments will be impacted by the uncertainties around the coronavirus epidemic and how that will affect consumer confidence.

Coronavirus could squelch Apple's iPhone momentum 

That call was a blow to Apple's stock, which fell earlier in the week but has recouped some of the losses. If shipments are impacted by the events resulting from the coronavirus, it will hurt the momentum that Apple and the iPhone have regained over the past six months. In its fiscal 2020 first quarter, which it posted in late January, Apple reported iPhone sales of $55.96 billion, which was up 8% year over year and higher than the $51.92 billion Wall Street was expecting. That was driven by what CEO Tim Cook called on an earnings conference call "exceptional" demand for the iPhone 11, iPhone 11 Pro, and the iPhone 11 Pro Max. Cook said the iPhone 11 was the top-selling model every week during the December quarter.

But Cook did warn on an earnings conference call that the coronavirus is having an impact. He said Apple has closed one of its retail stores in Wuhan and a number of channel partners have also shuttered their stores. Those that are still open have reduced operating hours.

"While our sales within the Wuhan area itself are small, retail traffic has also been impacted outside of this area across [China] in the last few days," Cook said. "We have attempted to account for this in our guidance range that we've provided you."

Apple expects revenue to be between $63 billion and $67 billion for its fiscal 2020 second quarter, which is wider than usual and reflective of the uncertainty related to the coronavirus outbreak.

Wall Street sounds the alarms 

TF Securities analysts aren't the only ones warning about the impact the coronavirus may have on Apple's iPhone shipments and thus its stock price. Wedbush Securities analyst Daniel Ives cautioned that if the virus isn't contained by the middle of February, consumers may see delays of up to two weeks on orders for new iPhones. If it spills into March, the negative impact will be even greater.

The analyst warned it could even hurt shipments and sales of the iPhone SE2, which Apple is rumored to launch in the spring. The next iteration of the SE, the SE2 is a cheaper model that has the same chip as the higher-end iPhones and targets cost-conscious consumers. Delays in shipments of that phone could materialize if the virus isn't contained by the spring.

All of this means that investors in this tech stock should prepare for more declines in shares of Apple if the coronavirus isn't contained soon.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Could the coronavirus outbreak hurt Apple's shares? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Donna Fuscaldo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.