Google’s new ad business is a mess, according to the head of one of the tech companies that makes up the service.
In a series of tweets Tuesday, CEO Sundar Pichai warned of a future where Google would stop making money on its ad business and instead rely on its existing ad revenue stream for profits.
Pichai, in his first public appearance since the company launched the AdSense-powered Google Analytics product, said he was confident that the company could turn around the AdWords business in three years and turn a profit on its revenue.
“The key to turning around AdWords is not just making a lot of money, but doing so while still retaining control over it,” Pichay said.
“I think that the core of the problem lies in the business model.
The core of AdWords has changed.”
Pichay’s tweet comes just days after the head on Google’s business and product teams told investors that AdSense revenues had declined by 35 percent in the first half of 2017.
That was followed by another slide in AdSense revenue by 30 percent in Q4.
“AdSense is still one of Google’s largest revenue streams, but the decline in revenues over the past year is significant,” the executives said.
“We have made tremendous strides over the last year and believe we have an extremely robust platform for advertising and analytics.”
Google declined to comment on the tweet.
Piketty, meanwhile, said AdSense will likely be dead within three years.
“I think AdSense is a business for a generation that’s gone by and hasn’t learned anything from it,” he said.
Pohlai’s warning echoes a similar one made by AdWords’ former chief financial officer and head of marketing, John Graham, who warned last week that Google will need to shut down AdSense as a business.
Graham is now a venture capitalist at Sequoia Capital, a venture capital firm.
Pichánsai’s tweet came a day after Google announced it would stop providing ads to publishers that have not paid Google to deliver ads.
The company said it will focus its advertising on advertisers that do pay Google.
Graham said in a statement that he was “confident that we can return to profitability” with AdWords.
Pidgeys warning came in a series that came a few days after Google’s former chief marketing officer, Jeff Howard, said the company’s ads business is not sustainable.
Howard, who also is now at Sequoit Capital, made similar comments in a letter to investors in December.
“We cannot continue to invest in AdWords and spend money to pay advertisers to get ads on our websites, without significant cost savings and a meaningful impact on our ad revenue,” he wrote.