uploads/2018/07/Amazon-net-income-1.png

How Amazon Is Widening the Gap with Competitors

By

Updated

Amazon’s digital ads business

Amazon’s (AMZN) digital ads business continued its blazing growth trajectory in the second quarter. The tech giant’s revenue from its Other businesses, which primarily include revenue from its digital advertising business, had another quarter of triple-digit growth.

Revenue for the segment grew a whopping 129% YoY (year-over-year) in the second quarter, reaching $2.19 billion. It grew 132% YoY in the first quarter.

The company’s advertising business could give Facebook (FB) and Google (GOOG) a run for their money in the coming years.

One reason its ad business is booming is because it can provide advertisers useful information, including when a user purchased something, to show an ad’s effectiveness. Merchants who sell products on the platform often buy ads on Amazon.

Article continues below advertisement

How Amazon’s non-core businesses are key for its core business

Amazon’s net profits have been increasing lately on the back of strength in its AWS and ad businesses. That means the company can continue to keep prices in its core business aggressively low, which gives it an edge over other e-commerce companies.

These lucrative non-core businesses also allow Amazon the luxury of investing in new technology and logistics in order to speed up deliveries.

Advertisement

More From Market Realist