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A startup sector slowdown in 2020 could be unexpectedly bad news for the tech giants (FB, GOOG)

A startup sector slowdown in 2020 could be unexpectedly bad news for the tech giants (FB, GOOG)
AP Photo/Mark Lennihan



If the startup sector cools off in 2020 it could be bad news for tech giants.




Bank of America analyzed six key startups that IPO'd in 2019 and found that the growth of their total ad spend is rapidly dropping.




If this is representative of the broader startup ecosystem, it could mean Facebook and Google will start to lose an easy source of revenue growth.




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A slowdown in the startup sector in 2020 might not just be bad news for entrepreneurs and investors — it may also throw an unexpected wrench into Facebook and Google's businesses.
A report published by Bank of America analysts earlier this month makes the case that the markets' rough treatment of newly-public startups could — if it continues next year — translate into a broad slowdown in ad spending by startups. That, in turn, could crimp revenue for the advertising-based business which rely on those startups.
The report underscores the interconnectedness of the modern tech sector, and how events in one corner can ripple out and affect the broader market in unpredictable ways.
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