T AT&T Inc

By Jack Nicas 

AT&T Inc. said on Wednesday it is pulling much of its advertising from Google over concerns that its ads may have run alongside controversial videos, extending the financial impact of a controversy that was once just a public-relations issue for Google.

AT&T said that it is suspending all of its advertising spending on Google except for search. That means AT&T is pulling all ads from Google's YouTube site and the more than 2 million third-party websites in Google's advertising network.

"We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate," AT&T said. "Until Google can ensure this won't happen again, we are removing our ads from Google's non-search platforms."

A Google spokeswoman said the company doesn't comment on specific clients.

AT&T is the largest company yet to reduce its spending on Google following reports that it placed brands' ads on YouTube videos supporting terrorism.

Other companies, including HSBC Holdings PLC, Royal Bank of Scotland Group PLC, L'Oréal SA and Volkswagen AG's Audi have all reduced spending on Google advertising over the past several days in response to the controversy.

Google has apologized to marketers for any cases in which their ads appeared next to inappropriate content. On Tuesday, the company unveiled changes to its ad policies and enforcement designed to prevent such cases.

AT&T is positioning itself as a budding competitor to Google as an advertising platform, pitching its proposed merger with Time Warner Inc. as a defense against Google's growing power in the industry.

Write to Jack Nicas at jack.nicas@wsj.com

(END) Dow Jones Newswires

March 22, 2017 14:35 ET (18:35 GMT)

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