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'Four horsemen' analyst: Ad blockers are hurting Alphabet

Wedbush: 20% of Alphabet ad revenue could be at risk

Wedbush analyst James Dix attributed Alphabet's stock downgrade to four factors on CNBC's "Fast Money: Halftime Report" on Wednesday: mobile search, consumers, digitization and payment technology.

Google mobile searches monetized much faster and better than expected thanks to self-identified consumers, Dix said, which the numbers reflected.

When search traffic shifts to more of a paid model than an organic one, however, those same consumers tend to drive business downward thanks to features like ad blockers and white lists, which Dix said habituate consumers "to taking more active control of their advertising."

Another threat to the paid search business model is something Dix called "payments innovation," which allows companies to match the ads served to buyers with whether those consumers made any purchases, regardless of whether those purchases were from the company using the feature or not.

Finally, the average consumer's "purchase path" is digitizing faster than expected, according to Dix, which may drive users away from clicking on ads that are shown to them regardless of relevance, going straight to their websites of choice to make their purchases.

When asked why investors should listen to Dix, who has reportedly been on the wrong side of this trade since July 2013, he said that the timeliness of his new, never-before-heard thesis is tied to the surprises brought about by these four trends. He also added that Google does not provide breakdown on the parts of its business that drive outperformance.

"I think one of the fundamental things is [that] it's difficult to change your business model to compete with a different business model," Dix said.

He continued, "The challenge for an incumbent like Alphabet is 'why would I pursue a business model which is lower margin, maybe lower return, because it becomes more like a payments platform and a payments model, versus my search advertising model, which is such a good model,' and you've seen this time and time again."