Google's Cookie Crumble: How A Browser Update Could Reshape $600B Ad World

Alphabet Inc GOOG GOOGL Google is advancing significant changes to online user tracking, impacting the $600 billion online advertising industry. 

Beginning Thursday, Google will start testing restricted cookie use on 1% of Chrome users, with plans to eliminate cookies for all Chrome users by year-end. 

This shift targets third-party cookies advertisers use to track internet users, a practice that consumer advocates criticize for privacy invasion, the Wall Street Journal reports.

Despite Google introducing tools to help replace cookies, industry stakeholders like the IAB Tech Lab believe the market is unprepared for this transition, WSJ writes. 

Anthony Katsur, CEO of the IAB Tech Lab, criticizes the timing of the total ban, especially during the fourth-quarter advertising peak. Google insists its tools balance business goals and consumer privacy.

Mozilla's Firefox and Apple's Safari have already implemented limits on tracking cookies. 

Although delayed multiple times due to industry feedback, Google's decision to follow suit is part of a broader initiative named Privacy Sandbox. 

The U.K.'s Competition and Markets Authority oversees Google's plans, ensuring no preferential treatment for Google's products.

Major ad-tech companies have raised concerns about technical challenges and gaps in Google's proposals, complicating the testing needed for the transition. 

Ad industry executives express mixed reactions, some relieved by Google's progress and others worried about insufficient preparation time. 

The shift away from cookies could impact ad targeting and prices, as seen in Firefox and Safari's experiences. 

During this significant industry change, Google remains committed to enhancing user privacy while aiming to maintain value for advertisers.

Earlier reports have revealed that Google plans to phase out third-party cookies for 1% of Chrome users in the first quarter of 2024. 

Furthermore, the tech giant has reaffirmed its commitment to expand this phase-out to a broader user base of the Chrome browser in the second half of 2024.

Price Action: GOOG shares traded lower by 0.37% at $139.85 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image by Deepanker Verma from Pixabay