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Revenues Beyond Retail Setting The Stage SPONSOR LOGO
Amazon’s “Other” Revenues • AWS: Leading cloud services provider • Marketplace: 3rd party sellers on Amazon • Advertising: 3rd party advertiser on Amazon • RW Baird: only 10% of revenues but more than half of total operating profit
Source: RW Baird
Amazon’s Ad Business • Quietly Lunched in 2006 • Grown to hundreds of staff • Multiple ad formats: banners, SEM, sponsored listings • Estimates of from $600m to $1b in high margin revenues per year
Marketplace >2m sellers • Powers unparalleled assortment depth and breadth -- plus data • Over $4b in marketplace sales (2011) McKinsey & Co. Source: Internet Retailer, Forrester
Inventory + Marketplace + Ads = Relevance “Where did you begin the research for your most recent online purchase?” Source: Forrester
Why This Isn’t Just Google’s Problem “If we think about Amazon in two worlds, one world is an Amazon with ads and lower prices. Another world is an Amazon with no ads and higher prices. Which one would we choose? …we would take Amazon with ads and lower prices.” -Lisa Utzschneider, Global Head of Advertising, Amazon.com