Google Inc (NASDAQ:GOOGL) has announced a feature called ‘sponsored search’ which will let the advertisers get in the Google Inc (NASDAQ:GOOGL) Play Store and Google search results by paying the search engine giant. Some media reports claimed that this feature can damage Facebook Inc (NASDAQ:FB) ads business, but many experts think that this is not the case rather Google Inc (NASDAQ:GOOGL) will do more harm than good by rolling out a paid search features.
Google Inc (NASDAQ:GOOGL) is the search engine giant used by billions daily. Featured search results option will let the advertisers show their products and business in the results. But this could backfire because the end users will not get the results they intend to locate. Facebook Inc (NASDAQ:FB) ads business is independent of Google Inc (NASDAQ:GOOGL) and the company is working on multiple methods to generate new streams of revenue.
Facebook Inc (NASDAQ:FB) reported that around 69% of its ads revenue came from mobile ads, specifically mobie app ads. But if Google Inc (NASDAQ:GOOGL) launches featured search, apps other than Facebook Inc (NASDAQ:FB) ad-backed apps could turn out in the search results, giving a damage to Facebook Inc (NASDAQ:FB)’s revenue. But there is a high chance that Google Inc (NASDAQ:GOOGL) will never launch sponsored ads completely in play store. The reason is again, the user base. If someone is searching for a hotel app, and the results show him 3,4 sponsored apps instead of best apps that are given good reviews, this would create a backfire from the end user, killing the Google Play store revenue.
Facebook Inc (NASDAQ:FB) has still an established ads business in iOS play store. Google Inc (NASDAQ:GOOGL) will have to weigh its options before launching its sponsored ads feature.
David Tepper’s Appaloosa Management Lp owns around 600,000 Google Inc (NASDAQ:GOOGL) shares.
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