Shares of Criteo (NASDAQ:CRTO) were down 14% as of 11:30 a.m. EDT Tuesday after multiple analysts voiced concerns over a report from AdWeek that Alphabet's (NASDAQ:GOOG)(NASDAQ:GOOGL) Google is considering changes to its handling of third-party ads in Chrome and its Google Marketing Platform. Today's drop extends a more than 12% decline yesterday given the market's initial reaction to the news.
For perspective, I noted yesterday that even though Criteo has made progress in its transformation to a multiproduct platform in recent quarters, this situation partly echoes Criteo's plunge in late 2017 after Apple rolled out new Intelligent Tracking Prevention (ITP) technology for its iOS platform and Safari Web browser.
Sure enough, this morning KeyBanc Analyst Andy Hargreaves argued that while "incentives and antitrust issues make a full ITP-like solution in Chrome very unlikely, ... we will not be able to disprove the bear case until Google provides more clarity on its plans, which is likely to create an overhang on CRTO that we do not expect to ease in the near term."
Meanwhile, SunTrust analyst Matthew Thornton worried not only that Chrome may represent around half of Criteo's current revenue, but also that Google's move could encourage other smaller browsers to implement similar restrictions, amplifying the negative impact to Criteo's financial results.
Of course, Criteo could also opt to provide some clarity by outlining exactly how much revenue it currently generates from Google products, as well as its potential courses of action to mute the impact of any potential changes Google might make. But I suspect we won't receive any such clarification until Google makes a final decision regarding its way forward. In the meantime, given the rising chorus of skeptics on Wall Street, it seems likely that Criteo shares will remain under pressure.