Google and Facebook Need Advertising 'Moonshots'

Google and Facebook are among the most valuable companies in the world thanks to their grip on the advertising market. The big question is whether investors are overestimating the companies' ability to keep expanding their dominance.

The Alphabet Inc. unit and Facebook Inc. pulled in a combined $114 billion in revenue from advertisements in 2017, excluding the money that Google turns over to partners such as Apple. That means more than one out of every five dollars in the $500 billion global advertising market goes to Google and Facebook, based on Magna Global estimates of worldwide ad spending. Excluding advertising sales in China, where neither company has made much headway, Google and Facebook are responsible for about 25 percent of annual advertising revenue.