Dark Traffic = Lost Eyeballs

According to a new report, there’s been a massive 49% surge in web traffic that publishers can’t measure—or make money from—over the past three years.

The study comes from adtech company Ad-Shield, which says it’s the first to take a deep dive into the growing phenomenon of “dark traffic.”

So, what exactly is dark traffic? In short, it’s page views that fly completely under the radar. These users are running ultra-strict ad blockers that shut down everything: on-site analytics, even ads that are normally allowed through, cookie consent banners, paywalls—you name it.

That’s different from the more common, softer ad blockers, which still let through basic analytics and some ads, just not the in-your-face kind.

Ad-Shield estimates there are 976 million people worldwide contributing to this invisible traffic—around 18% of all web traffic. Back in 2019, that number was closer to 590 million.

And the trend isn’t slowing down. By 2026, they’re predicting dark traffic will reach 1.1 billion users.

For publishers and marketers, that’s a lot of eyeballs slipping through the cracks.

Streaming Advertising CPMs

Every streamer continues to push a premium no ad service along with ad supported service. Netflix is the largest streamer and with how adoption of ad supported plans is going, I can’t see how we have any issue with dramatic increases in ad CPMs anytime soon.

This comes as Amazon Prime also floods the market with inventory desperate for advertising.

“Streaming advertising in the U.S. surged 62.5% to $18.8 billion between 2021 and 2024, according to WPP Media, a big ad-buying firm. But that growth wasn’t enough to keep up with the increase in the number of streaming outlets trying to sell ads. Aside the emergence of FAST channels and of outlets like Amazon Prime Video jumping into the ad market, streaming device makers like Roku, Amazon (through its Fire TV devices) and Samsung also sell ads on the menu lineups that pop up on their devices.”

EU Crackdown on Google

Search results about to look a bit different in the EU.

“Alphabet Inc.’s Google will propose highlighting search results from other companies’ shopping and travel platforms at the top of its page in an attempt to comply with the European Union’s Digital Markets Act and fend off fines, people familiar the matter said.

Under the plan, a box at the top of Google’s search results will show ranked options from price-comparison companies’ websites, the people said, asking not to be identified because the proposal is not yet public. Users will be able to either proceed to the sites of its competitors — such as Expedia or Booking — or click on individual results to go to the page of a hotel or airline, they said.

The site that Google determines is most relevant will be featured and a drop-down menu will hold links to the others, including Google’s own comparison services, the people said. In a variation of the plan, Google would show a basic list of direct links to travel or shopping suppliers in a space below the box.”

Uber Side Hustles

Who would have guessed that Uber was operating a data-labeling platform? And until Meta’s recent acquisition of Scale AI, how many people even knew what data labeling was? While Uber hasn’t disclosed exact revenue from that arm of the business, its advertising division is now generating $1.5 billion annually—and it’s only just getting started, with ad types soon expected to cover the cost of user rides.

Uber’s advertising business is clearly a major driver behind the company’s rising cash flow and profitability. Despite lingering concerns over autonomous competition from Waymo and Tesla, Dara Khosrowshahi is delivering a masterclass in maximizing core operations while scaling adjacent ventures.

Note: Lyft also recently announced similar new ad types at Canne.

Search Engine vs ChatBot: Crawled vs Visits

The loss of Google traffic is a seismic shift in how websites earn their traffic. Whilst some sites are saying Reddit and Facebook are making up for the loss of that traffic, one can’t deny stats recently shared by Cloudflare’s CEO.

For every crawled page, Google sent one visitor to a publisher. Just over 10 years ago it was 2 crawled pages to 1 visitor and today that number is 18 crawled pages to 1 vistor:

If you overlay the referral traffic from OpenAI versus Google, the picture completely changes. OpenAI crawls 1,500 pages for every visit to a publisher:

The chart above doesn’t include Anthropic which is up to 60,000 pages per visit. Clearly the dynamic has changed and will continue to accelerate further. Users of AI ChatBots do not click the sources.

The Loss of Google Traffic

Reddit and Facebook have made up for falling referral traffic from Google for the Daily Beast.

Tucker said that falling referral traffic, especially from search due to the impact of generative AI, is “affecting everybody, including subscriptions sites like our own”.

As ChatGPT by OpenAI rises to become the 5th most visited website, and platforms like Reddit and Facebook increasingly drive referral traffic, no site remains insulated—declining Google traffic is now a shared challenge across the industry, affecting all content types.

WAUs vs DAUs

Benedict Evans nails it on chatbot (ChatGPT, Perplexity, Claude, Gemini) uses weekly versus daily as daily is what truly indicates a sticky user. Old habits have yet to break…but will.

“But however these questions turn out, it’s important to remember that if you use five different LLMs every day, and haven’t done a Google search this year, and all your friends are the same… then you’re in a bubble, for now. ”

Meta Always Finds A Way

Interestingly Meta stopped using the method as soon as this news was released.

“We disclose a novel tracking method by Meta and Yandex potentially affecting billions of Android users. We found that native Android apps—including Facebook, Instagram, and several Yandex apps including Maps and Browser—silently listen on fixed local ports for tracking purposes.

These native Android apps receive browsers’ metadata, cookies and commands from the Meta Pixel and Yandex Metrica scripts embedded on thousands of web sites. These JavaScripts load on users’ mobile browsers and silently connect with native apps running on the same device through localhost sockets. As native apps access programatically device identifiers like the Android Advertising ID (AAID) or handle user identities as in the case of Meta apps, this method effectively allows these organizations to link mobile browsing sessions and web cookies to user identities, hence de-anonymizing users’ visiting sites embedding their scripts.

This web-to-app ID sharing method bypasses typical privacy protections such as clearing cookies, Incognito Mode and Android’s permission controls. Worse, it opens the door for potentially malicious apps eavesdropping on users’ web activity.”

Cloudflare CEO: AI is disrupting clicks and content creation

Matthew Prince recently sat down with David Rubenstein for an interview, during which the Cloudflare CEO highlighted how the internet’s core business model—search—is undergoing rapid transformation.

“And if you look back 10 years ago, if you did a search on Google you got back a list of 10 blue links. And we have data on how Google processed those 10 blue links. And the answer was that for every two pages of a website that Google scraped they would send you one visitor, right? So scrape two pages, get one visitor. And that was the trade.”

The amount of scraping Google does hasn’t changed but that rate of 2 to 1 is now 6 to 1.

“What’s changed? The answer is that today, 75 percent of the queries that get put into Google get answered without you leaving Google, get answered on that page. So if you want to ask, when did David Rubenstein start Carlyle? About 10 years ago it would take you to maybe a Wikipedia page or something else. Today, the answer comes up right on the page, and you don’t have to go anywhere else.”

Without the click to the source, the creators stop making the content.

“So it was 2:1 10 years ago for Google. It’s 6:1 today. What do you think it is for OpenAI? 250:1. What do you think it is for Anthropic? 6,000:1, right?

And so the business model of the web can’t survive unless there’s some change, because more and more the answers to the questions that you ask won’t lead you to the original source, it will be some derivative of that source. And if content creators can’t derive value from what they’re doing, then they’re not going to create original content.”

Google vs Apple: Wall Street Search Query Narrative

Apple: Google is no longer seeing growth.

“Cue also revealed that the number of searches through Safari fell for the first time ever in April, suggesting users are looking to AI sources as alternative ways to find information.”

Google: Yes we are.

“We continue to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms. More generally, as we enhance Search with new features, people are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways, whether from browsers or the Google app, using their voice or Google Lens.”

Google Greases Everyone

It is well known Apple is earning billions off of Google for being the Safari default search engine. Mozilla is no different.

“Mozilla earned $570 million in revenue last year, 85% of which came from Google as a result of a deal Mozilla has to share ad revenue from Google search queries coming via Mozilla’s Firefox browser, the chief financial officer of the internet nonprofit testified on Friday.”

Opera is also no different. Opera indicated that 40% of their revenue came from Google in 2024.

Just as the US Department of Justice seeks to eliminate default search deals, Gemini is making its way onto iOS and ads are making their way into Google chatbots.

One thing is clear: Many are benefiting from the “default.”

Slowing Retail, Fierce Cloud: Amazon’s Profit-Heavy, Growth-Light Quarter

Back again for another quarter from the toll booth of eCommerce: Amazon. Sales grew at their slowest pace since Q1 2023, while the Services segment recorded the weakest growth in company history. Forward guidance highlighted continued uncertainty, stating that ‘our results are inherently unpredictable and may be materially affected by many factors, such as…tariff and trade policies…’ Despite sluggish top-line growth, both profits and margins improved significantly year over year and sequentially. While revenue growth was muted, profitability remains on an upward trajectory. Amazon did not “buy” this quarter.

1. Service sales continue to outpace the product sales yet sales clearly has slowed versus prior quarterly growth rates.

2. In previous quarters, Amazon’s sales growth was primarily driven by Advertising and Third-party Seller Services. This quarter, while Third-party Seller Services still contributed 17% to total revenue growth, the largest drivers were AWS and Online Stores, accounting for 34% and 22% of the growth, respectively.

3. Online sales made up just 37% of total revenue, reflecting Amazon’s strategic shift toward more profitable segments and large-scale vendors. This focus was further supported by strong growth in AWS and Advertising. Notably, Third-party Seller Services recorded their slowest growth rate since being reported as a separate line item. Despite currency exchange headwinds and higher-than-expected capital expenditures for 2025, the quarter stood out for its strong profitability.

Bottom Line: Several themes from last quarter persist: AWS remains a consistent growth engine, while Seller Central growth appears to be plateauing. Amazon continues to emphasize Vendor Central, prioritizing net PPM performance over vendor size, with a strong focus on brand strength. We continue to advocate for a hybrid approach that leverages both 1P (Vendor Central) and 3P (Seller Central) models to maintain operational flexibility and maximize profitability.

Robinhood Q1 Results: Gold Members, ARPU and Crypto

Disclosure: I have a small personal position in Robinhood common stock, positions in and out of Robinhood started in July 2024. I use the platform for trading and use their credit card.

Robinhood announced another quarter of earnings this evening. Prior overviews are here and here.

Assets Under Custody/Net Deposits - Assets saw an increase of 70% in the latest quarter versus last year. A significant portion of the increase was due to TradePMR acqusition to offset lower overall values and limited slower crypto growth.

Gold Stickiness - Prior quarter was 10.5%, latest quarter was 12.4% with 3.19 million Gold subscribers. The subscriber base continues to grow and that stickiness leads to higher activity and lower churn. Note that the credit card is now up from 100k subs to over 200k subs this quarter. The CFO noted they will continue to grow credit card subs yet will do so with a “measured” approach.

Average Revenue Per User (ARPU) Growth - Whilst the average is down slightly quarter over quarter, the yearly growth figures remain incredibly healthy.

Some other stats:

• Robinhood Strategies was recently launched and has 40,000 users and $100mm in assets thus far.

• Futures traded 4.5mm contracts in April alone, more than all of Q1, 1billion in last 6 months and believe this is in early stages.

Bottom Line: Though the trading wasn’t as robust specifically in crypto this quarter and an acquisition assisted the business in meeting the numbers, Robinhood continues to drive industry change and build complementary businesses that grow stickiness. No reason not to remain long in my opinion.

Amazon's Streaming Content Needs Hardware and Software

Amazon clearly has the content. Here comes the hardware and software. Would assume Amazon seeks a key partner to run their TVs off the software very soon. There aren’t many players that aren’t currently using Google or their own legacy OS. Even Walmart has their Vizio play for TVs.

“Amazon continues to pursue a transition away from Android for its TV hardware: The company plans to release a first TV streaming device powered by its still-unannounced Vega OS later this year and has been courting major publishers to bring their apps to the platform, I’ve been able to confirm with sources familiar with the company’s plans as well as through a number of leaks.”

Panic Buying for Temu, Shein, Taobao and DHGate?

Despite the ad spend of Temu and Shein dropping, Bloomberg is reporting of stockpiling by customers leading to a strong year over year sales gains for Temu and Shein.

In parallel, it seems that customers are seeking purchases direct from factories with Taobao entering the top 5 within app stores.

Whether it’s tariffs, de minimis exclusions, or emerging apps, many customers will continue to enjoy the thrill of the hunt and actively seek out a deal.

Temu’s US Ad Spend Craters on Facebook & Google

As the tariff news continues, looks as though Temu and Shein are not only indicating a price increase but also aggressively pulling back on advertising on Google and TikTok. Some reports have come out that Google Shopping is completely turned off by Temu. Reports of up to 10% of Facebook and Instagram ad revenue was from Temu.

Some of these charts are staggering:

Google Is Searching for an Answer to ChatGPT →

Bloomberg’s feature piece this month is all about the changes underway at Google to stem the slow bleeding of query searches to ChatGPT. The focus of keeping the queries on Google as opposed to pushing to a website or advertiser.

I found this quote from creators and publishers to be the most interesting and comprehensive:

“Something they told us in that meeting was to never expect to go back to our old levels of traffic,” she says, “because search has changed.”

Default Search & Assistants on iOS and Android

Here comes OpenAI/ChatGPT. The fight for defaults in both search and assistants is heating up.

We know that ChatGPT is the most sticky and now the offerings are being made available on iOS for the default search engine (currently Google). Although the default search engine change has been available for quite some time, the choices of Yahoo, Bing, DuckDuckGo and Ecosia aren’t the most compelling alternatives. This offering is also a bit more technical and likely won’t lead to widespread updates from users until the selection process is easier or Apple shifts away from Google. Unlikely until OpenAI can outspend Google to the tune of $20 billion plus for the default luxury.

Don’t think that OpenAI is stopping there. Android now provides the ability to change your default assistant from Google to ChatGPT as well.

Robinhood Q1 Update $HOOD

Latest views Robinhood ($HOOD) stock are here but company provided a preview into how Q1 is shaping up.

“Gold Subscribers have reached 3.1 million, up over 400 thousand this year and representing 12% adoption relative to our Funded Customer base

Net Deposits in Q1 have already surpassed $10 billion, marking our fifth straight quarter of over $10 billion in Net Deposits”

The 3.1 million subscribers is up from 2.6 million reported last quarter at 10.5%. As for net deposits, last Q1 net deposit totaled 11.2 billion. The CEO also mentioned the Robinhood credit card now numbers >100,000 cardholders but will be “getting to multiples this year.” Sounds a bit lite in deposits but the stickiness factor clearly is there and growing.

Replay is here.

Gap Traction $GAP →

Gap clearly hit all the high notes Wall Street needed to hear: Comp sales improvements, higher year over year earnings and minimal tariff impact.

“For the fourth quarter, Gap posted a profit of $206 million, or 54 cents a share, compared with $185 million, or 49 cents a share, for the same period a year earlier. Analysts had forecast per-share earnings of 36 cents.

Meanwhile, comparable sales rose 3% after Banana Republic returned to growth during the quarter. Overall, Gap, Banana Republic and Old Navy logged gains of 7%, 4% and 3% in comparable sales, respectively, offsetting a 2% decline from Athleta.

The company said its exposure to tariffs is “minimal.”

“We currently have less than 10% of our product coming from China and less than 1% from Canada and Mexico,” O’Connell said.”

However, we must keep in mind that sales are not growing. Yet.

“Quarterly revenue fell 3.5% to $4.15 billion, but came in ahead of Wall Street expectations for $4.07 billion, according to FactSet.

Looking ahead, Gap said it projects first-quarter sales to be flat to up slightly and full-year sales to rise between 1% and 2%. Analysts polled by FactSet had forecast first-quarter sales to grow around 1.5% and full-year sales to rise around 1.7%.”

Quite impressive. If continued comp sales increases happen, store closures are minimized and sales flip to positive, this is worth a bet despite being range bound for well over a year.