Alphabet, Inc. GOOG GOOGL has announced it is pushing back its planned phase-out of third-party cookies in its Google Chrome browser until the second half of 2024. On Monday, Bank of America analyst Justin Post said Google's decision to delay its cookie changes is good news for Alphabet investors and the entire online advertising industry.
What Happened? Cookies are small bits of text advertisers and publishers use to identify users and target ads. Last year, Google said it was planning to end support for third-party cookies in Chrome by 2023. In a new blog post on July 27, Google said it is delaying its cookie phase out to allow "more time to evaluate and test the new Privacy Sandbox technologies" that will serve as alternatives to third-party cookies in the future.
Why It's Important: Post said the cookie phase-out delay could alleviate a potential overhang for online advertisers in 2023 and may even suggest that Google expects a recovery in ad spending next year. He said the delay is modestly bullish for traditional ad tech companies like Trade Desk Inc TTD, which traded higher by 7.4% on Monday.
Post said additional testing is a good thing for Google's ad tech solutions as well.
Bank of America has a Buy rating and $125 price target for Alphabet.
Benzinga's Take: Investors should expect intense regulatory scrutiny on Google's Privacy Sandbox solutions between now and the 2024 phase-out of third-party cookies. Tech companies have already been under a microscope for privacy and antitrust issues in recent years, and this transition could potentially raise eyebrows on both fronts if it is not handled correctly.
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