Why Alphabet Is Much More Than an Advertising Company
Internet search giant Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has built one of the world's largest advertising businesses. If you type in a question to the company's search engine, Google, it is not surprising to see a handful of paid promotions sitting on top of actual search results. Similarly, Alphabet's video-sharing website, YouTube, often requires its users to preview ads before watching a video.
While advertising is still Alphabet's bread and butter, there is little denying that growth from ads is falling. One reason for this is a broader, macroeconomic effect of inflation. Due to higher costs of goods and services, advertisers are being more careful and more selective with budget allocations. Moreover, YouTube has been battling the widely popular short-form video app TikTok for quite some time. While YouTube still attracts billions of views, some advertisers may be questioning the direction the video website is going now that TikTok is gaining market share.
Although these are valid concerns, there is one business underneath Alphabet's umbrella that seems to be overlooked and underappreciated. While overall growth at the company seems to be stalling, there is one shining gem: Google Cloud Platform. Let's dive into Alphabet's third-quarter earnings and the company's outlook, and hone in on Google Cloud and the various investments Alphabet has made to compete in this market.
Source Fool.com
