More Companies Fear Amazon Takeover

Amazon may have a few tricks up its sleeve to position itself above ad giants such as Google and Facebook. Traditionally, a majority of Amazon’s revenue derived from its consumer-focused online marketplace, but the company appears to be looking to expand earnings from other ventures.

Its latest earnings showed a 60% increase in the “other revenues” category, which totaled $1.3 billion. This is believed to be primarily from its online advertising sales. For the time being, its advertising revenue is slim compared to Google’s $80 billion. However, with Amazon’s increased initiatives, Google and Facebook could quickly find themselves being surpassed by this major online retailer.   

Amazon’s CFO, Brian Olsavksy, was questioned about the company’s advertising plans, but kept the strategy relatively under wraps.

"Our goals there are to be helpful to customers and enhance their shopping and viewing experiences, mostly with targeted recommendations. We think that's a good strategy rather than invasive things that take away from the shopping experience."

Speculations of online advertising becoming an integral part of Amazon are something for Facebook and Google to be concerned about. Amazon is focusing on using online ads to boost the overall consumer experience largely through its sponsored products program. As Amazon continually looks for ways to evolve, more companies will begin to view them as a potential threat.

 

 

Sources:

http://www.businessinsider.com/amazon-advertising-business-is-growing-fast-2017-2

https://services.amazon.com/services/sponsored-products-overview.htm

 

 

Frankie Mesones