2 Red Flags for Alphabet in 2022
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is one of the biggest companies in the world, but even it is not immune to challenges. The company offers most of its services to customers for free, so it relies on advertising to generate revenue.
That puts Alphabet at risk of the same forces the industry faces. Two red flags for Alphabet in 2022 are the increasing ad supply entering the market and macroeconomic forces lowering marketers' spending appetite.
Interestingly, the advertising industry is no different than others regarding the laws of supply and demand. If you recall from introductory economics, when supply increases, prices decrease. Unfortunately for Alphabet, a mass of new advertising inventory is coming online at the end of this year. Netflix, one of the world's biggest streaming services in terms of subscribers and viewership, is launching an ad-supported tier of its service. That will bring new advertising inventory marketers will undoubtedly be interested in buying.
Source Fool.com
