Remember those Apple (NASDAQ:AAPL) The iOS 14 privacy changes that really shook up some popular internet stocks? Well, it will happen again soon, but this time we’re going to cover Google’s privacy changes.
Google and its parent company, Alphabet (NASDAQ:GOOGNASDAQ:GOOG), unveiled Google’s privacy changes in mid-February. The Privacy Sandbox announcement was made in a blog post by Anthony Chavez, VP of Product Management for Android Security & Privacy.
“Specifically, these solutions will limit the sharing of user data with third parties and will work without cross-app identifiers, including advertising identifiers,” he said. “We are also exploring technologies that reduce the potential for secret data collection, including safer ways for apps to integrate with advertising SDKs.”
Google’s privacy changes will not happen immediately. They are in about two years. According to ForbesGoogle is moving away from third-party cookies, but will be looking for ways to protect consumer privacy while still enabling ad targeting.
If you’re investing in internet stocks, you have every right to be concerned. Here are three actions to watch for as Alphabet rolls out its Google privacy changes:
- Metaplatforms (NASDAQ:Facebook)
- Break (NYSE:BREAK)
- LendingTree (NASDAQ:TREE)
Google Privacy Stocks: meta-platforms (FB)
Meta Platforms, formerly known as Facebook, has been hit hard by Apple’s Application Tracking (ATT) privacy changes. The same could happen when Google rolls out its Privacy Sandbox.
Meta says it lost $10 billion in 2022 due to Apple’s privacy changes. “Apple has created two challenges for advertisers,” Chief Financial Officer Sheryl Sandberg said. “The first is that the targeting accuracy of our ads has decreased, which has increased the cost of results. The other is that measuring these outcomes has become more difficult.
Zak Doffman of Forbes writes that the real problem, however, is Meta itself.
“The problem isn’t Apple or Google, it’s Facebook’s business model. It tracks people and sells them targeted advertising. People are fed up and Facebook has nothing to rely on outside of its Metaverse, and will it work?” he wrote.
FB stock is down more than 23% so far in 2021.
Like Meta’s Facebook, Snap has also been affected by Apple’s ATT privacy changes. And it makes sense that it was affected by Google’s privacy changes.
What’s good for Snap, however, is that the social media company and parent company of Snapchat is doing better at managing its risks. It is therefore possible that SNAP stocks are less risky than Meta or other Internet companies that rely on targeted advertising.
Snap says it’s “making solid progress” in developing new privacy-preserving ad measurement tools.
CFO Derek Andersen said Snap built its advertising platform “with privacy by design.” He said the impact of Apple’s changes is “likely to be experienced differently” at Snap than at other companies.
Last quarter, Snap reported its first quarter net profit, with revenue of $1.3 billion and earnings of 22 cents per share.
Google Privacy Stocks: LendingTree (TREE)
OK, you might be wondering why LendingTree is on this list with two social media stocks. The reasoning is simple.
LendingTree operates an online lending marketplace for people seeking loans and other credit products. Customers can get mortgages, refinance, buy home equity loans, search for credit cards, small business loans, personal loans and more.
And here’s the kicker: LendingTree was the top Internet display ad buyer for all of 2020, spending $187 million. It’s more than Amazon (NASDAQ:AMZN), Google, Verizon Communications (NYSE:VZ), and Berkshire Hathaway (NYSE:BRK-ANYSE:BRK-B).
Any company that relies on digital advertising to reach a targeted audience will be one such action to watch as Google rolls out its own privacy tools.
LendingTree announced its quarterly results on February 25. It posted revenue of $258.30 million, narrowly beating analysts’ expectations of $258.25 million. It was also a 16% increase from a year ago. Earnings per share was a loss of 14 cents, which was better than the expected earnings loss of $1.16 per share.
“As we execute our strategy, we are well positioned to maintain our leadership in consumer credit,” said CEO Doug Lebda. “We are harnessing the incredible power of our brand, with its consistently high levels of aided awareness and combining it with our unparalleled depth of relationships with our partners, to be the ultimate resource for consumers who want to take control of their financial lives. “
TREE stock is down 9% so far in 2022, outperforming the Dow Jones Industrial Average and the S&P500.
At the date of publication, Patrick Sanders held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 he led the investment advice section at US News & World Report. Follow him on Twitter at@1patricksanders. As of this writing, he does not hold a position in any of the aforementioned titles..