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Saturday, October 20, 2012

Amazon's next project


Facebook knows who your friends are. Google knows what you’re interested in finding on the internet. Amazon knows what you’ve bought, and has a pretty good idea of what you might want to buy next.

If you were an advertiser, which company’s data sounds most valuable to you? If you had a product you wanted to sell, which of those things would you most want to know?

In a digital economy where some of the internet’s biggest companies and the country’s richest people have built their fortunes on the ability to more precisely target ads, one company sits on a trove of data it has barely started to exploit. In internet advertising-speak, visitors to are further down the purchasing funnel than visitors to Google or Facebook. “The opportunity is huge,” says Marcus Pratt, director of insights and technologies for Mediasmith, a San Francisco digital ad agency. “With rich data on its users, Amazon is uniquely positioned to match advertisers with shoppers.”

In a recent note to investors, analysts at Baird Equity Research said they estimated Amazon would generate anywhere from $500 million to $1 billion in advertising revenue this year. Amazon won’t break out those numbers, and the estimate doesn’t put Amazon anywhere near the tens of billions Google makes from ads every year. But for a company whose main business isn’t selling ads but selling stuff, a billion dollars is far from nothing. And Amazon is just getting started.


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