Mark Zuckerberg arrives before the inauguration of Donald Trump as the 47th president of the United States takes place inside the Capitol Rotunda of the U.S. Capitol building in Washington, D.C., Monday, Jan. 20, 2025.
Kenny Holston | Via Reuters
The digital advertising market was sunny enough for investors this past quarter, providing what could be a last hurrah before a looming economic storm from President Donald Trump‘s tariff onslaught.
Wall Street cheered the first-quarter results from tech giants like Meta and Alphabet, which both saw shares rise on strong revenue and earnings that beat analyst expectations.
The strong numbers from the online advertising titans in the face of economic worries showed that companies were still willing to promote their goods and services to consumers across the internet.
Amazon’sburgeoning online advertising unit also topped analyst estimates for the quarter. The online retail giant’s first-quarter ad sales jumped 19% year-over-year, representing a faster growth rate than Meta and Google’s advertising sales, which were 16% and 9%, respectively.
AppLovin shares surged nearly 15% on Wednesday after the provider of mobile ad technology surpassed analysts estimates and said it would sell its Tripledot Studios mobile gaming business.
Shares of The Trade Desk jumped 18% on Friday, just one day after the ad-tech firm reported first-quarter earnings that beat on the top and bottom lines.
The celebrations stopped, however, when it came time for executives to discuss the rest of the year.
Meta Chief Financial Officer Susan Li last week said that “Asia-based e-commerce exporters” are spending less on digital advertising due to the cessation of the de minimis trade loophole that benefited retail upstarts and heavy Facebook spenders like Temu and Shein.
“It’s very early, hard to know how things will play out over the quarter, and certainly, harder to know that for the rest of the year,” Li said during a call with analysts.
Executives at Alphabet and Pinterest shared similar sentiments about slower, Asia-specific ad sales and broader macroeconomic uncertainty heading into the rest of the year. Snap went so far as to pull its second-quarter guidance over the unpredictable economy potentially shrinking corporate ad budgets for the rest of the year.
Jeff Green, CEO of The Trade Desk, also noted the challenging economy on Thursday, saying that marketers face an “important time” as they work “amid increased macro volatility to start the year.”
“The good news is, Q1 was really strong, and Q4 of last year was pretty darn good,” said Sameer Samana, head of global equities and real assets for Wells Fargo Investment Institute.
But with companies from a variety of sectors lowering or even suspending their 2025 sales guidance, as in the case of auto giants like Ford Motor and toymaker Mattel, Samana believes the good times are likely coming to an end.
“What it’s telling me is that we better enjoy this rally, we better enjoy these good numbers,” Samana said. “This is going to be about as good as it gets for the coming year.”
In an ominous sign for social media and online advertising companies, retail and consumer packaged goods businesses like Procter & Gamble have warned of weakening sales amid the turbulent economy.
Jasmine Enberg, a vice president and principal analyst at eMarketer, said companies in these sectors generate “about half of all social ads in the U.S.,” and a decrease in their advertising spend “will have a ripple effect on the social ad market.”
Mark Zuckerberg, CEO of Meta Platforms Inc.; from left, Lauren Sanchez; Jeff Bezos, founder of Amazon.com Inc.; Sundar Pichai, CEO of Alphabet Inc.; and Elon Musk, CEO of Tesla Inc., during the 60th presidential inauguration in the rotunda of the U.S. Capitol in Washington, D.C., on Jan. 20, 2025.
Julia Demaree Nikhinson | Bloomberg | Getty Images
Enberg believes that a potential slowdown in advertising spend will hurt smaller tech platforms more than their larger rivals.
“I think what we’re likely to see is what we tend to see in times of economic uncertainty, which is that advertisers seek refuge in larger platforms that provide them with scale and consistent ROI,” Enberg said.
But even tech giants like Meta may feel some financial pain, explained Greg Silverman, the global director of brand economics at consulting firm Interbrand.
Although other retailers may decide to run Facebook ads now that China-linked retailers like Temu are stepping back, those promotional campaigns are unlikely to be as lucrative for those companies, said Silverman.
Temu was willing to spend big on Facebook ads because it previously benefited from the de minimis trade loophole, Silverman said, and it’s unlikely that any U.S. retailer will do the same, particularly with a rickety supply chain and high tariffs potentially raising the cost of their goods.
“The return on ad spend that Temu was getting on Facebook is going to be hard for anyone else to recreate,” Silverman said.
For Wells Fargo’s Samana, the current economic uncertainty can be traced to trade policy and tariffs and their ensuing effects throughout the markets.
“We started the year with very low levels on tariffs,” Samana said. “Tariffs at the end of this are going to be higher, and they’re going to be meaningfully higher, and that is just not good for markets. I think that’s the only point that matters.”
Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.
The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.
Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.
“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.
“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.
“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”
Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.
Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.
“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.
“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”
Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.
Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.
Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.
Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.
The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.
But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.
Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.
In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.
“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”
Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.
Sajjad Hussain | AFP | Getty Images
Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.
Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.
The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.
The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
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The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.
Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.
“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.
Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.
Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.
The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.