Without much fanfare, CEO Jeff Bezos has set his sights on yet another
market: the $200 billion online advertising industry that is dominated
by Alphabet Inc.'s Google and Facebook Inc. While Amazon's annual ad
revenue is relatively small at an estimated $1.2 billion, the
company has assembled a Google-like set of advertising tools and
services that could become Amazon's next big thing.
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Amazon has unique advantages as an advertising middleman. It knows more
about people’s shopping habits than perhaps any company on earth. The
company's Prime web video service means Amazon is also collecting
information about the entertainment habits of millions of people.
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The biggest wild card is the potential connection between Amazon's
digital advertising business and AWS, one of the company's crown jewels.
AWS, which sells on-demand computing horsepower to companies, is
already the technology backbone for big chunks of the internet
advertising industry. It's possible to imagine the ubiquity of AWS
helping Amazon's digital advertising business, and vice versa.
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