Google NetworkThin moat

Alphabet (Google) (GOOGL) — moat facet

The only shrinking line is also the one the courts are circling, and every dollar it loses makes Alphabet's margins look better.

Google Network is the one Alphabet revenue line that is shrinking. It peaked at $32,780 million in 20221 and fell in each of the next three years, to $29,792 million in 20252, while every other advertising line grew. It is now about 7.4% of Alphabet's revenue3, and the reasons it is declining say as much about the open web as about Google.

Google Network revenue ($B)$17.6B2017$20.0B2018$21.5B2019$23.1B2020$31.7B2021$32.8B2022$31.3B2023$30.4B2024$29.8B2025Red: the three years of decline. Alphabet Forms 10-K FY2019, FY2021, FY2023, FY2025
The partner ad network peaked in 2022 and has shrunk every year since, the only Alphabet revenue line to do so.

The line is advertising that Google places on other companies' websites and apps. The filing defines it as revenue "generated on Google Network properties participating in AdMob, AdSense, and Google Ad Manager"4, three products that arrived by different routes. AdSense let publishers put Google's ads on their pages and share in the money. The display side was bought: Google completed its acquisition of DoubleClick, which offered ad serving and management technology to advertisers, publishers and agencies, in March 20085. The mobile side was bought too, when Google closed its acquisition of AdMob in May 20106. Together they made Google the plumbing for a large share of the web's display advertising: the tools the advertiser buys through, the exchange where the impression is auctioned and the software the publisher sells with.

The economics are those of a middleman. Google collects what the advertiser pays and passes a share to the site or app that showed the ad; those payments to Google Network partners are part of traffic acquisition costs7, which reached $59.9 billion across all of Google's advertising in 20258. Because so much of each Network dollar goes out again, the line earns far less per dollar than Search, and Alphabet says its overall TAC rate has been falling mainly because revenue has shifted from Network properties to Search & other9. A shrinking Network line therefore lifts Alphabet's margins even as it trims revenue. Alphabet does not disclose the line's profit separately.

The 2025 decline had a specific cause: it was "primarily due to a decrease in AdSense revenues, partially offset by an increase in AdMob revenues"10. The web side fell while the app side grew. The unit metrics show the shape of it: Network impressions fell 7% while cost-per-impression rose 7%11, so fewer ads were shown on partner properties, each at a higher price. The growth history has two halves. From $17,616 million in 201712, the line climbed to $31,701 million in 202113 and edged up once more in 2022. It then fell 4.5% in 2023, 3.0% in 2024 and 1.9% in 202514. The decline has continued into 2026, with revenue of $6,971 million in the first quarter against $7,256 million a year earlier15, and $7,303 million in the second against $7,354 million16.

It is also the line with the heaviest legal exposure. In the American ad tech case Google was found to have monopolised parts of the market for publisher tools and ad exchanges, and on September 2, 2026 the court rejected the government's request to divest the AdX exchange, accepting most of the behavioural remedies instead17. Europe moved in parallel: the European Commission fined Google €2.95 billion over self-preferencing in ad tech in September 2025 and signalled that only a sale of part of the business would resolve its concerns18. Neither ruling has yet broken the business up, but both constrain how Google can tie its buying tools to its own exchange, which is the source of much of its advantage here.

The outlook is continued slow decline in the web half, partly offset by apps. Only some of the causes are Google's to control. The filing's own numbers show fewer impressions on partner properties year after year, and Google's AI answers, which keep more readers on the results page, add to the pressure on the very sites that carry AdSense. The line's rating here is thin for that reason. It has scale and technology, but the partners can switch exchanges, the regulators are looking for ways to make switching easier, and the underlying inventory is contracting.

The falsifying number is impressions. They fell 7% in 2025. A return to growth in Network impressions, particularly on the AdSense side, would say the open web is holding its audience and that the decline was cyclical. Another year of falling impressions offset only by higher prices would confirm that Google is running a shrinking business well, which is a respectable thing to do, and a different thing from owning a durable one.

Moat trajectory: Narrowing

Revenue has fallen three years running, from $32.8 billion in 2022 to $29.8 billion in 2025, with impressions down 7% in 2025 and declines continuing in both quarters of 2026. The ad tech remedies and the EU fine both constrain the tying between Google's buying tools and its exchange that underpinned the business.

The number that tests this moat
Reported
Google Network revenue, peak to latest
$32.8B (2022) → $29.8B (2025)

The only shrinking revenue line, down three years running, with impressions falling 7% in 2025. A return to growth in impressions would say the open web is holding; another fall offset only by price would confirm a managed decline.

Source: Alphabet Forms 10-K, FY2023 and FY2025 ↗
References
  1. ReportedIt peaked at $32,780 million in 2022 and fell in each of the next three years, to $29,792 million in 2025, while every other advertising line grew.
    Alphabet Form 10-K, FY2023 — revenues by type for 2022 (Search & other $162,450m, YouTube ads $29,243m, Google Network $32,780m, Google subscriptions, platforms, and devices $29,055m, Google Cloud $26,280m, Other Bets $1,068m) and recast segment operating income for 2022 (Google Cloud $(1,922)m, Other Bets $(4,636)m); Google DeepMind reported within Alphabet-level activities from the second quarter of 2023 — FY2022–FY2023 · publ. January 31, 2024 · source ↗
  2. ReportedIt peaked at $32,780 million in 2022 and fell in each of the next three years, to $29,792 million in 2025, while every other advertising line grew.
    Alphabet Form 10-K, FY2025 — Note 2, revenues by type: Google Search & other $175,033m / $198,084m / $224,532m; YouTube ads $31,510m / $36,147m / $40,367m; Google Network $31,312m / $30,359m / $29,792m; Google subscriptions, platforms, and devices $34,688m / $40,340m / $48,030m; Google Cloud $33,088m / $43,229m / $58,705m; Other Bets $1,527m / $1,648m / $1,537m; total revenues $307,394m / $350,018m / $402,836m (2023 / 2024 / 2025) — FY2023–FY2025 · publ. February 5, 2026 · source ↗
  3. Moat Explorer calcIt is now about 7.4% of Alphabet's revenue, and the reasons it is declining say as much about the open web as about Google.
    Moat Explorer calculation from Alphabet's filed revenue and segment figures (Forms 10-K FY2019, FY2021, FY2022, FY2023, FY2025; Q1 and Q2 2026 releases) — growth rates, shares of revenue, compound annual growth, segment operating margins and loss-per-revenue-dollar ratios — FY2017–Q2 2026 · publ. Computed September 2026 · source ↗
  4. ReportedThe filing defines it as revenue "generated on Google Network properties participating in AdMob, AdSense, and Google Ad Manager", three products that arrived by different routes.
    Alphabet Form 10-K, FY2025 — Item 7, how each revenue type is generated (Search & other incl. distribution-partner traffic, Gmail, Maps and Play; Network = AdMob, AdSense and Google Ad Manager; subscriptions = YouTube TV, Music and Premium, NFL Sunday Ticket, Google One; platforms = Google Play; devices = Pixel; Cloud = GCP consumption fees and subscriptions, Workspace; Other Bets = autonomous transportation and internet services), TAC paid to distribution and Google Network partners, content acquisition costs primarily related to YouTube, and Note 15's description of Other Bets — FY2025 · publ. February 5, 2026 · source ↗
  5. ReportedThe display side was bought: Google completed its acquisition of DoubleClick, which offered ad serving and management technology to advertisers, publishers and agencies, in March 2008.
    Google Inc. press release filed as Exhibit 99.1 to Form 8-K, 'Google Closes Acquisition of DoubleClick' (March 11, 2008) — online ad serving and management technology for advertisers, web publishers and ad agencies — March 2008 · publ. March 11, 2008 · source ↗
  6. ReportedThe mobile side was bought too, when Google closed its acquisition of AdMob in May 2010.
    Official Google Blog, 'We've officially acquired AdMob!' (May 27, 2010) — Google closed its acquisition of the mobile advertising company AdMob — May 2010 · publ. May 27, 2010 · source ↗
  7. ReportedGoogle collects what the advertiser pays and passes a share to the site or app that showed the ad; those payments to Google Network partners are part of traffic acquisition costs, which reached $59.9 billion across all of Google's advertising in 2025.
    Alphabet Form 10-K, FY2025 — Item 7, how each revenue type is generated (Search & other incl. distribution-partner traffic, Gmail, Maps and Play; Network = AdMob, AdSense and Google Ad Manager; subscriptions = YouTube TV, Music and Premium, NFL Sunday Ticket, Google One; platforms = Google Play; devices = Pixel; Cloud = GCP consumption fees and subscriptions, Workspace; Other Bets = autonomous transportation and internet services), TAC paid to distribution and Google Network partners, content acquisition costs primarily related to YouTube, and Note 15's description of Other Bets — FY2025 · publ. February 5, 2026 · source ↗
  8. ReportedGoogle collects what the advertiser pays and passes a share to the site or app that showed the ad; those payments to Google Network partners are part of traffic acquisition costs, which reached $59.9 billion across all of Google's advertising in 2025.
    Alphabet Form 10-K, FY2025 — cost of revenues table: TAC $54,900 million (2024) and $59,926 million (2025), TAC rate down from 20.7% to 20.3%; cash flow statement: purchases of property and equipment $32,251m (2023), $52,535m (2024) and $91,447m (2025); Google Network revenues $30,359m (2024) and $29,792m (2025) — FY2025 (year ended December 31, 2025) · publ. February 5, 2026 · source ↗
  9. ReportedBecause so much of each Network dollar goes out again, the line earns far less per dollar than Search, and Alphabet says its overall TAC rate has been falling mainly because revenue has shifted from Network properties to Search & other.
    Alphabet Form 10-K, FY2025 — Item 7, how each revenue type is generated (Search & other incl. distribution-partner traffic, Gmail, Maps and Play; Network = AdMob, AdSense and Google Ad Manager; subscriptions = YouTube TV, Music and Premium, NFL Sunday Ticket, Google One; platforms = Google Play; devices = Pixel; Cloud = GCP consumption fees and subscriptions, Workspace; Other Bets = autonomous transportation and internet services), TAC paid to distribution and Google Network partners, content acquisition costs primarily related to YouTube, and Note 15's description of Other Bets — FY2025 · publ. February 5, 2026 · source ↗
  10. ReportedThe 2025 decline had a specific cause: it was "primarily due to a decrease in AdSense revenues, partially offset by an increase in AdMob revenues".
    Alphabet Form 10-K, FY2025 — Item 7 MD&A, revenue discussion: Search & other +$26.4 billion; YouTube ads +$4.2 billion, driven by direct response then brand advertising; Google Network −$567 million on lower AdSense, partly offset by AdMob; paid clicks +6%, cost-per-click +7%, Network impressions −7%, cost-per-impression +7%; subscriptions, platforms, and devices +$7.7 billion on paid subscriptions across YouTube services and Google One; Google Cloud +$15.5 billion on Google Cloud Platform infrastructure and platform services; Other Bets operating loss +$3.1 billion on a valuation-based compensation charge related to Waymo; cost of revenues up on TAC, content acquisition costs and depreciation — FY2025 against FY2024 · publ. February 5, 2026 · source ↗
  11. ReportedThe unit metrics show the shape of it: Network impressions fell 7% while cost-per-impression rose 7%, so fewer ads were shown on partner properties, each at a higher price.
    Alphabet Form 10-K, FY2025 — Item 7 MD&A, revenue discussion: Search & other +$26.4 billion; YouTube ads +$4.2 billion, driven by direct response then brand advertising; Google Network −$567 million on lower AdSense, partly offset by AdMob; paid clicks +6%, cost-per-click +7%, Network impressions −7%, cost-per-impression +7%; subscriptions, platforms, and devices +$7.7 billion on paid subscriptions across YouTube services and Google One; Google Cloud +$15.5 billion on Google Cloud Platform infrastructure and platform services; Other Bets operating loss +$3.1 billion on a valuation-based compensation charge related to Waymo; cost of revenues up on TAC, content acquisition costs and depreciation — FY2025 against FY2024 · publ. February 5, 2026 · source ↗
  12. ReportedFrom $17,616 million in 2017, the line climbed to $31,701 million in 2021 and edged up once more in 2022.
    Alphabet Form 10-K, FY2019 — revenues by type for 2017, 2018 and 2019: Search & other $69,811m / $85,296m / $98,115m; YouTube ads $8,150m / $11,155m / $15,149m; Google Network Members' properties $17,616m / $20,010m / $21,547m; Google Cloud $4,056m / $5,838m / $8,918m; Google other $10,914m / $14,063m / $17,014m; Other Bets $477m / $595m / $659m; total $110,855m / $136,819m / $161,857m — FY2017–FY2019 · publ. February 4, 2020 · source ↗
  13. ReportedFrom $17,616 million in 2017, the line climbed to $31,701 million in 2021 and edged up once more in 2022.
    Alphabet Form 10-K, FY2021 — revenues by type for 2020 and 2021 (Search & other $104,062m / $148,951m; YouTube ads $19,772m / $28,845m; Google Network $23,090m / $31,701m; Google other $21,711m / $28,032m; Google Cloud $13,059m / $19,206m; Other Bets $657m / $753m) and segment operating income as then reported (Google Cloud $(5,607)m / $(3,099)m; Other Bets $(4,476)m / $(5,281)m) — FY2020–FY2021 · publ. February 2, 2022 · source ↗
  14. Moat Explorer calcIt then fell 4.5% in 2023, 3.0% in 2024 and 1.9% in 2025.
    Moat Explorer calculation from Alphabet's filed revenue and segment figures (Forms 10-K FY2019, FY2021, FY2022, FY2023, FY2025; Q1 and Q2 2026 releases) — growth rates, shares of revenue, compound annual growth, segment operating margins and loss-per-revenue-dollar ratios — FY2017–Q2 2026 · publ. Computed September 2026 · source ↗
  15. ReportedThe decline has continued into 2026, with revenue of $6,971 million in the first quarter against $7,256 million a year earlier, and $7,303 million in the second against $7,354 million.
    Alphabet Q1 2026 earnings release — quarter ended March 31, 2026 against 2025: Search & other $60,399m vs $50,702m; YouTube ads $9,883m vs $8,927m; Google Network $6,971m vs $7,256m; subscriptions, platforms, and devices $12,384m vs $10,379m; Google Cloud $20,028m vs $12,260m with operating income $6,598m vs $2,177m; Other Bets revenue $411m vs $450m and operating loss $(2,100)m vs $(1,226)m — Q1 2026 · publ. April 2026 · source ↗
  16. ReportedThe decline has continued into 2026, with revenue of $6,971 million in the first quarter against $7,256 million a year earlier, and $7,303 million in the second against $7,354 million.
    Alphabet Q2 2026 earnings release — quarter ended June 30, 2026 against 2025: Search & other $63,271m vs $54,190m; YouTube ads $11,055m vs $9,796m; Google Network $7,303m vs $7,354m; subscriptions, platforms, and devices $12,911m vs $11,203m; Google Cloud $24,768m vs $13,624m (+82%) with operating income $8,814m vs $2,826m; Google Services operating income $39,544m on $94,540m; Other Bets revenue $382m vs $373m and operating loss $(1,799)m vs $(1,246)m — Q2 2026 · publ. July 22, 2026 · source ↗
  17. ReportedIn the American ad tech case Google was found to have monopolised parts of the market for publisher tools and ad exchanges, and on September 2, 2026 the court rejected the government's request to divest the AdX exchange, accepting most of the behavioural remedies instead.
    PPC Land, 'DOJ loses AdX divestiture bid as Brinkema accepts behavioral remedies' — order of September 2, 2026 (E.D. Va., 1:23-cv-108): divestiture of AdX, open-sourcing of DFP's final auction logic and contingent divestiture of DFP Remainder 'REJECTED'; most behavioural remedies, as modified, 'ACCEPTED'; Memorandum Opinion sealed; liability found April 17, 2025 — September 2, 2026 · publ. September 2026 · source ↗
  18. ReportedEurope moved in parallel: the European Commission fined Google €2.95 billion over self-preferencing in ad tech in September 2025 and signalled that only a sale of part of the business would resolve its concerns.
    Law Society Gazette (Ireland), 'EU fines Google €2.95 billion for ad breaches' (Sept 8, 2025) — the European Commission fined Google €2.95 billion over adtech self-preferencing, gave it 60 days to respond, and signalled that only a sell-off of part of its services would address the conflicts of interest — September 2025 · publ. September 8, 2025 · source ↗
Sources
Generated September 16, 2026