Google decides to keep cookies in Chrome after all

Google (GOOGL) decided not to get rid of third-party cookies in its Chrome web browser, catching many by surprise, even after three delays. The company will instead introduce a new prompt for users to choose how they would like to be tracked across its search engine. Macquarie calls the news “a major twist on a years-long saga,” while Morgan Stanley says that while it still expects the industry to continue to move away from third-party cookies and towards first-party data and authenticated traffic, the pace of change is likely slower without the depreciation catalyst and sees this lengthening the timeline for benefits to accrue to LiveRamp (RAMP).

COOKIES STAYING: Third-party cookies in Google’s Chrome web browser are staying after all. Instead, the company said it will continue to offer Privacy Sandbox APIs for advertisers and publishers to use, and will give consumers a choice on how they would like to be tracked across its search products.

“We are proposing an updated approach that elevates user choice. Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time. We’re discussing this new path with regulators, and will engage with the industry as we roll this out.

“As this moves forward, it remains important for developers to have privacy-preserving alternatives. We’ll continue to make the Privacy Sandbox APIs available and invest in them to further improve privacy and utility. We also intend to offer additional privacy controls, so we plan to introduce IP Protection into Chrome’s Incognito mode,” Google said in a blog post.

MAJOR TWIST: In “a major twist on a years-long saga,” Google announced it will not deprecate third-party Chrome cookies, will continue to offer Privacy Sandbox APIs for advertisers and publishers to use, and will give consumers a new choice, Macquarie said following the news. The firm believes this presumably means Chrome users will be able to select whether they prefer to be tracked with cookies or placed into contextual interest groups for the purposes of being served relevant ads. While Chrome users may or may not care much about this, regulators will likely acknowledge Google backing away from the heavy-handed Sandbox efforts, Macquarie says.

The firm also notes that “not surprisingly,” Criteo (CTRO) stock jumped 9% on the news after trading up 1% with the S&P 500 on the day. Criteo has long been viewed by investors as most at risk from cookie deprecation, and has called out $140M-$160M in likely potential lost revenue in 2025 from the loss of cookies that help its retargeting business.

On the other hand, LiveRamp traded down on the news. Macquarie sees implications as mixed for the company, which factored in some expected market friction from cookie deprecation weighing on its fiscal year 2025 guidance when it reported results in May, though it would have expected LiveRamp to see upside to demand for its data services in the eventual absence of cookies. The fact that Sandbox efforts will continue, and that LiveRamp offers robust data alternatives, including with its Google PAIR clean room data matching service, means LiveRamp remains prominent in ad targeting, the firm argues.

NEAR-TERM PRESSURE: Morgan Stanley says that while the firm expects the industry to continue to move away from third-party cookies and towards first-party data and authenticated traffic, the pace of change is likely slower without the depreciation catalyst and this lengthens the timeline for benefits to accrue to LiveRamp. Given this view, the firm thinks the announcement likely adds near-term pressure on LiveRamp shares, though it sees minimal risk to full year 2025 guidance as it included a wider range and a net impact from both opportunities and risks from cookie-deprecation. The firm maintains its Overweight rating on LiveRamp shares, but notes that it is cautious on the Street’s pace of revenue acceleration in fiscal year 2026, absent the cookie-catalyst.

NOTABLE: Google’s talks to buy Wiz, a cybersecurity startup, for $23B have fallen apart, The Wall Street Journal’s Miles Kruppa reports. Wiz is now aiming for an IPO, according to an email to employees sent Monday from Wiz CEO Assaf Rappaport and viewed by The Wall Street Journal. “While we are flattered by offers we have received, we have chosen to continue on our path to building Wiz,” Rappaport wrote, adding that Wiz intends to reach $1B in annual recurring revenue ahead of the IPO. A $23B purchase of Wiz would have been Google’s largest acquisition, Kruppa notes.

PRICE ACTION: In Tuesday morning trading, shares of Google’s parent Alphabet have gained almost 1% to $182.80. Also higher, Criteo has advanced about 2.5% to $45.86, while LiveRamp has dropped 5.5% to $30.