Feeds

Amazon reaping $600 MEELLLION a year in ad sales

You thought they just sold books? Tsk

Maximizing your infrastructure through virtualization

Amazon made more than $600m from advertising last year and is on track to make $835m in 2013, thanks to knowing what we buy and not having to share the wealth.

The numbers come from eMarketer and are only educated guesses as Amazon doesn't publicly share its figures.

The logic is sound, though, and if the trend continues then Amazon will be making $1.1bn from advertising sales by 2015; an important revenue stream when you're competing with supermarkets as well as High Street stores.

Amazon puts advertising in the "other" category of revenue, along with its AWS cloud service. Both are growing steadily so they partly obfuscate each other, but even taking the highest estimates for AWS leaves advertising revenue becoming ever more significant.

Amazon's advertising is, in most part, restricted to its own pages; unlike Google, which acts as an agent placing adverts for a percentage cut. Amazon litters its online store with targeted adverts, and flicks up context-sensitive ads based on search terms and previous purchases. It also makes money from selling the advertised products, too.

It's an impressive combination, and increasingly important as Amazon further encroaches into the super-competitive supermarket business next year, competing against companies well versed in exploiting their own real estate.

Supermarkets don't generally hire shelves to producers of content, but they demand discounts in exchange for prominent placement (such as end of the aisle) or space in the chiller cabinet, in the same way that Amazon places adverts around its home page.

Those viewing Amazon's ads are also more tolerant; they've arrived at the site with the intention of purchasing something, so being told about other things is acceptable, if humorously misdirected.

The greatest threat to Amazon's advertising revenue, however, is shared by the rest of the internet; how to squeeze all those ads onto the screen of a mobile phone. Amazon's mobile client is almost entirely ad free, so to make money the company will have to solve that problem – or get back to selling books, like it used to. ®

Top three mobile application threats

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Microsoft: We're making ONE TRUE WINDOWS to rule us all
Enterprise, Windows still power firm's shaky money-maker
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.