Amazon’s ad business is growing rapidly

Amazon (AMZN) operates its core e-commerce business on very thin margins. However, its cloud computing and advertising businesses are not only lucrative but also growing rapidly.

That has led to a surge in Amazon’s net income in recent quarters, as you can see in the graph below. In the second quarter, its ad business grew 129% year-over-year to $2.19 billion.

Lately, Amazon has been increasing the number of sponsored ads related to a user’s search on its platform. Users are increasingly using Amazon rather than Google for their product searches.

Amazon’s US Ad Revenue Is Eating Up Facebook and Google

eMarketer expects Amazon to be third in US digital ad dollars

According to the latest research by eMarketer, Amazon is taking a larger share of US digital ad space. eMarketer revised its annual US digital ad estimates and now expects Amazon to rake in $4.61 billion in ads this year in the United States compared to the previous projection of $2.89 billion.

eMarketer expects Amazon to take third place in the space this year, behind Alphabet’s (GOOG) Google and Facebook (FB).

Amazon is now expected to corner 4.15% of US online ad dollars. Facebook’s and Google’s market shares are estimated to decline. By 2020, eMarketer expects Amazon to eat up 7% of the total US digital ad dollars.

Latest articles

The Hot Chips 31 Symposium started this week. Artificial intelligence was the hot topic among participants Intel, NVIDIA, and Advanced Micro Devices.

Today, Slack (WORK) opened 4.5% higher after MKM Partners analyst Rohit Kulkarni gave Slack stock a "buy" rating with a target price of $40.

Today, Aphria announced a deal with ParcelPal to deliver medical cannabis to patients. Also, Cole Cacciavillani's son has won a cannabis store license.

Today, IHS Markit released the US manufacturing PMI (purchasing managers’ index) data for August. The manufacturing PMI hit 49.9, down from 50.4 in July.

On May 1, smokable hemp will be banned in North Carolina. The state passed the North Carolina Farm Act, removing smokable hemp from its permissible list.

Chinese tech giant Tencent (TCEHY) posted better-than-expected Q2 earnings. Its revenue growth accelerated in Q2 due to a rebound in its gaming segment.