Why Google can’t stop investing

It seems “hard to quibble with the continued success of Google’s advertising business”, says Shira Ovide on Bloomberg Gadfly. Advertising revenue at Alphabet, Google’s parent company, rose $12bn last year, meaning that “in a single year Google found new business that was equivalent to half of Facebook’s total yearly sales”.

But the firm has a potential weakness. Advertisement sales on third-party sites, where Google acts as a middleman, are growing much more slowly than those on its own sites (web search pages, YouTube, Gmail and so on). If Google’s own sites were to decline in [...]