Facebook, Google and Amazon share prices have seen a decline. The companies could not meet the expectations and have missed revenue and earnings estimates. The future guidance too is gloomy.

Of the total global digital advertising revenue, an aggregated 75 per cent is earned by Google, Amazon and Facebook. In calendar year 2022, the digital advertising is expected to reach $300 billion.

Of late, there is slowdown in advertising revenue — both online and offline. It is on account of the slow down in economic activity. In recessionary conditions, advertisers cut the budgets.

There is competition to the Big Three from Apple, Spotify, Snapchat, Walmart, Pluto TV, IAC, Instacart, Roku, Yelp, and Tubi. All these entities earn a billion dollar plus ad revenue in the digital market.

Amazon earns revenue from advertising and cloud services. It has, in addition, the e-commerce business. The global consumption has slowed down, and that has affected its e-commerce division too.

YouTube has been affected by the shift in the viewership trends. It has seen fast growth in the ‘Shorts’ featuring videos of short duration. It has given YouTube a toehold in a market so far dominated by TikTok. But it is difficult to generate revenue from ‘Shorts’.

Facebook has been affected by the Apple’s ‘App tracking transparency’ policy. It allows iPhone users to opt out of being tracked by default. It becomes difficult for Facebook to deliver targeted advertising, which is its bread and butter. Metaverse too is a nascent business.
Big Tech is mature as a business. They are unlikely to deliver counter-cyclical performance in key markets. Slow down affects Big Tech. Smaller and nimbler startups have better capacity to adopt to the adverse times.