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Google-parent Alphabet (GOOGL) has an edge over Comcast (CMCSA) to be Netflix‘s (NFLX) partner for a new advertising-based service tier, a Google stock analyst said Friday.
BMO Capital Markets analyst Daniel Salmon made the determination after a recent meeting with digital advertising industry executives. A partnership between Netflix and Google would come amid growing competition in the internet TV advertising market.
“GOOGL was seen as the favorite over CMCSA’s FreeWheel (digital ad unit) to win the lead partnership role for NFLX’s advertising launch, which is expected this year in select non-U.S. countries,” Salmon said in a note to clients.
He went on to say: “(Digital ad firms) Innovid and Simulmedia thought Google Ad Manager was the favorite to win NFLX’s initial ad partnership, while Camelot felt Comcast’s FreeWheel has a better hand.”
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Google or Comcast’s video ad unit, FreeWheel, would supply technology to help serve up targeted ads. Google already provides some ad-buying technology to Netflix.
Google stock dipped 1.3% to near 2,345 in early trading on the stock market today. Netflix stock slipped 1.3% to 186.80.
The Wall Street Journal reported that Netflix held talks with various ad-tech players at the Cannes Lions advertising conference in June. The Journal also said Google and Comcast’s NBCUniversal emerged as front-runners to potentially partner with Netflix.
Analysts also see Trade Desk (TTD) or Magnite (MGNI) as potential partners of Netflix.
Netflix management on its first-quarter earnings call said the internet video streaming leader is building a lower priced, advertising supported tier. But the video streamer’s subscriber growth missed estimates, sending Netflix stock down.
Free ad-supported streaming television continues to grow in popularity, with offerings from Comcast’s Peacock streaming service and others. Further, Walt Disney (DIS) expects to launch an ad-supported streaming service in late 2022.
Also, Netflix reports second-quarter earnings on July 19.
Meanwhile, Google stock holds a Relative Strength Rating of 58 amid a bear market in technology stocks. Netflix owns a Relative Strength Rating of 6, while Comcast stands at 31, according to IBD Stock Check-up.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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7/08/2022 Get the latest Netflix news, plus stock quotes and analysis.
7/08/2022 Get the latest Netflix news, plus stock quotes and analysis.
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