At the altar of AI capex, Google is sacrificing the golden goose (twitter.com)

Google is facing criticism for adopting questionable tactics to artificially inflate revenue from its advertising business amid declining search volumes. The company has shifted from a second-price auction model to charging advertisers their maximum bids, potentially leading to significant increases in costs for lower-quality clicks. Additionally, Google has weakened keyword targeting precision, introducing “exact match (close variant)” settings that can display ads for thousands of unrelated keywords, frustrating advertisers who are now being billed for irrelevant clicks. These changes reflect a troubling trend within Google, as it seeks to maintain revenue growth despite a downturn in search engagement. Advertisers are seeing their budget caps disregarded, allowing overspending on unwanted keywords without recourse. While Alphabet reported strong overall revenue and cloud growth, this approach raises concerns about the long-term health of the advertising ecosystem. Critics argue that these short-sighted strategies undermine the foundational value that Google once provided, potentially sacrificing the company’s long-term profitability for immediate gains, fundamentally altering the landscape for digital advertisers.