It’s getting more costly for Alphabet (formerly known as Google) to buy friends in the tech world. Currently Alphabet pays companies like Apple to setup its Google service as the preferred search engine in their browsers. The costs for this privilege are rising, and Alphabet’s investors aren’t very happy about it. Dan Gallagher writes for the WSJ:
For Alphabet, the main issue for investors is the rising costs that Google has to pay partners to direct traffic to its sites. Those traffic acquisition costs totaled $21.6 billion in 2017—up 29% from the previous year. That outpaced the 20% revenue growth for Google’s core advertising business for the year, which weighs on the company’s profitability. Alphabet CFO Ruth Porat noted that the growth rate of these costs should start to moderate early this year.
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