Even Google (GOOGL) - Get Reportanalysts were mystified by Google management's lack of clarity on the details of it changing its advertising products, which caused first-quarter revenue to miss the mark.
But a hint from one analyst and some color from an advertising expert tells what was possibly behind Google's product change.
Behind Google's Ad Product Change
"We prefer Amazon (AMZN) - Get Report for share gains in online advertising," BMO Capital Markets analyst Daniel Salmon wrote in a Google note post-earnings, after mentioning that he is less optimistic on Google's ad revenue prospects for the next year or two in light of management's comments.
Mark Douglas, founder and CEO of Steelhouse, a firm that manages brands' advertising budgets and frequently coordinates with top executives at Google and Facebook (FB) - Get Report , told TheStreet that Salmon's theory on Amazon stealing ad market share has a lot of color to it.
"[Google's] Q1 is an indication that there was a shift at the start of new budget cycles -- start of the year," Douglas said. Advertisers will test out new platforms, and will do so at the beginning of the year, possibly trying out Amazon's emerging media and advertising platform, he said.
"On Amazon, the money has to come from somewhere. Since it's 'search marketing' on Amazon, it would most likely come from Google's budget," Douglas said. Therefore, Google has to change its ad product, if Amazon is indeed creating a better ad product.
He stressed that none of this is confirmed, but rather a real possibility. Google sales managers he's spoken with aren't completely privy to details of the product change yet.
Apple (AAPL) - Get Report , RealMoney's stock of the day, reported earnings Tuesday. RealMoney's Kevin Curran reminds that it's the short-term trader that needs to consider hardware and smartphone sales in China and the U.S., but that the long-term investor can lean on growth drivers such as services.