Amazon's Ad Business Is Taking Share from Google

Consumers are increasingly conducting product searches on Amazon as opposed to Google’s search box, enabling Amazon to capture high margin Ad Revenue at Google’s expense.

• Google’s Gross Margin ought to decline as GOOG’s revenue mix shifts to lower margin Revenue streams such as its various hardware products and subscription services.

• Thus, one would expect AMZN’s EPS to grow faster than GOOG earnings and for AMZN’s multiple to expand while GOOG’s multiple compresses, all else held equal.

• Every query conducted on ChatGPT, Perplexity AI or Claude has opportunity cost for Google search.

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