Thursday, January 18, 2018

Amazon Has a Plan toBecome Profitable. It’s Called Advertising - Bloomberg

Final paragraph: "Ultimately Amazon could upend the entire advertising industry, although some analysts believe Google will withstand the threat, as it did when Facebook pushed into the market. The ad money going to Amazon isn’t necessarily being redirected from Google. Instead it is dollars once allotted for television or offline retail promotions, according to Resolution Performance Media’s Manas, who says: “I’m seeing it come from all sorts of nooks and crannies.”" Also see Amazon’s ad business is growing faster than Google’s and Facebook’s, although the duopoly still dominates (Digiday)
"Having bet on Amazon cloud services and pushed the shares past $1,300, investors are now salivating about the ad business, which doesn’t require big investments in new data centers or shipping hubs and generates fat margins. On Monday, BMO Capital Markets upped its Amazon price target to $1,600 a share, based largely on the growth of the ad business. Some analysts are predicting Amazon will reach $2,000, making it the first company with a $1 trillion market value.

“Advertising is the most profitable business in the world,” says Jay Kahn, a partner at Light Street Capital, who notes that Chinese e-commerce giant Alibaba Group Holding Ltd. gets more than half its revenue from ads. “For Amazon, advertising is going to be more profitable than its cloud business.” Amazon declined to comment."
Amazon Has a Plan toBecome Profitable. It’s Called Advertising - Bloomberg

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