Alphabet’s (GOOGL) Google, which has long dominated the nearly $300 billion search advertising market, is now facing increasing competition from rivals such as Amazon (AMZN) and TikTok, the video platform owned by ByteDance. The research and analytics firm eMarketer projects that by 2025, Google’s share of the U.S. search ad market will drop below 50% for the first time in over a decade.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Other Players Emerging in the Search Ad Market
Amazon has steadily increased its market share by leveraging its e-commerce platform and vast user data to deliver highly targeted ads, posing a direct challenge to Google’s leadership.
Meanwhile, TikTok has emerged as a strong competitor, attracting advertisers with its highly engaged user base and innovative ad formats. Its ability to target younger demographics makes it a compelling option for marketers. Recently, TikTok introduced a feature that allows brands to target ads based on search queries, directly challenging Google’s core revenue stream.
Another rising competitor is Perplexity AI, an AI search platform backed by Amazon founder Jeff Bezos. It offers a unique feature where advertisers can sponsor follow-up questions from users, giving them more control over brand messaging. With plans to introduce ads alongside AI-generated answers, Perplexity AI is set to further increase competition for Google.
Google Is Making Efforts to Stay Ahead of the Curve
In order to keep up with the growing competition, Google recently disclosed plans to include ads in its new AI-powered search summaries, starting with mobile searches in the U.S. These summaries will provide direct answers to user queries and integrate relevant ads, showcasing how AI is transforming the way search and advertising interact.
Is GOOGL Stock a Good Buy?
Turning to Wall Street, GOOGL has a Strong Buy consensus rating based on 30 Buys and nine Holds assigned in the last three months. At $202.11, the average Alphabet price target implies 20.98% upside potential. Shares of the company have gained 19.89% year-to-date.
