From Seeking Alpha:
While analysts and Wall Street have been focused on Amazon’s (AMZN) decelerating revenues, a juggernaut has been emerging, hidden within the financial reports Amazon produces each quarter. That hidden juggernaut has been unassumingly known as “Other” in Amazon’s financial reports.
. . . .
Amazon’s “Other” segment, hidden deep within their financials and only explained by a footnote written in subscript font, has been growing at an unbelievable pace as of late.
. . . .
For those who’ve followed and invested in Alphabet’s Google, the concept is already understood. In the same way that companies pay Alphabet to place a link to their website in Google search results, companies will pay Amazon to have their products listed as a “sponsored product” high up in the search results when a user enters a term like “headphones” or “gaming consoles”.
. . . .
“…the world’s biggest ad agencies are racing to become specialists in how Amazon wants to do business, which is unlike anything they’ve seen before,” wrote Lara O’Reilly and Laura Stevens of the Wall Street Journal.
Without the controversies that plague YouTube advertising, Facebook (FB) advertising, or Google advertising, Amazon looks poised to compete for the position as the largest digital advertiser by revenue on earth.
Link to the rest at Seeking Alpha
When Amazon started, one of their most impressive features was that they showed me the books I was mostly likely to enjoy, not the ones that someone paid them to. Filling my search page with promoted books seems a lot like the Barnes & Noble model. Not sure they’re the company to emulate.
I already find the ads an annoying distraction. Next, consider the prominent listings of products that, while legitimate responses to my search, are actually from sketchy third party providers, and Amazon is showing every sign of burning through its usefulness and credibility in favor of the quick buck. This is, of course, the American way of doing business, but for many years, Amazon’s forte was its willingness to forgo the quick buck. It is the end of an era. Amazon will, of course, continue to be a behemoth for many years to come, but I think future generations will look back and see this as a turning point.
This is, of course, the American way of doing business
Who does it different?
I suspect the ads will be skewed to the specific user’s tastes and preferences as evidenced by their online Amazon purchasing. A large pool of advertisers can provide goods that appeal to lots of folks.
The same search can bring up one set of ads for one guy, and another set for someone else. It may enhance consumer satisfaction.
Let’s hope they get that part working. Mostly what I see in sponsored results is men without shirts, and that’s not something I have ever bought.
It’s a potential problem for Amazon if it’s not handled carefully. If my search results are dominated by advertising, rather than organic results, that is to say, best match and best reviewed, those results become less helpful to me. In a worst case, if I have to sift through lots of advertising to find what I really want, I might start looking at competitors.
Agreed, DM.