Google and Meta’s online advertising market share, which had established monopoly systems in the U.S. search engine and social media markets, fell below 50% for the first time in eight years. The big tech industry, whose monopoly system collapsed last year, turned to tight management for the first time in decades. This year is expected to be the most difficult year for the big tech industry as anti-trust regulations targeting them are spreading around the world amid sluggish main business.
Citing research firm Insider Intelligence, the Wall Street Journal (WSJ) reported on the 15th (local time) that Google and Meta’s share in the U.S. digital advertising market fell below 50% for the first time since 2014. It was analyzed that Google and Meta’s share in the digital market has decreased due to the rapid growth of startups such as TikTok of ByteDance in China.
Big Tech’s performance continued to soar for two years from 2020 due to the COVID-19 pandemic. As advertising demand is concentrated online due to the spread of non-face-to-face consumption, the core business profits of big tech companies have soared. However, concerns over an economic slowdown that began last year spread, which directly hit product sales and online advertising sales.
Faced with stagnant growth, Big Tech is reinforcing manpower reduction and cost reduction. Amazon announced its plan to cut 18,000 employees earlier this year, and Google’s parent company Alphabet decided to fire 15% of its employees from Verily, an affiliate of the healthcare sector. Meta reduced about 13% of its total workforce through high-intensity restructuring last year.
A site that aggregates the job cuts of tech companies (Layoffs).According to fyi), the number of job cuts by technology companies reached 170,000 last year. The cuts that have continued since last year are expected to be a prelude to stronger restructuring. Analysts say that the prolonged Russia-Ukraine war and the subsequent continued global inflation and interest rate hikes will hamper the global economy.
Dan Ives, an analyst at Wedbush Securities, said, “The days when big tech makes money easily are over,” adding, “It will pass difficult times such as the ‘strongest fifth-class storm’.” “Technology companies that used to spend money like rock stars in the 1980s are now spending like the elderly within a fixed budget,” he stressed.