This morning Om Malik pointed out that thanks to the buzz around its Kindle e-reader and cloud computing success, it can be easy to forget that Seattle-based Amazon is an e-tailer at heart. Malik likens Amazon to the online equivalent of super-retailer WalMart now that they have shoes covered.
After reading investor notes from Wall Street Internet Analyst Ben Schachter, Malik was surprised to learn that Amazon accounts for roughly 5% of total video game sales in the United States.
Video Games are an Important Driver for AMZN: We estimate that AMZN currently has ~5% U.S. market share in the category, representing about ~$900mil-$1bn according to our estimate of 2009 U.S. sales (~4% of AMZN’s 2009E total sales and 16%-18% of its estimated 2009 U.S. Media revenue).
Schachter's investor notes got Malik thinking:
Maybe Amazon has become such a behemoth and e-commerce such a mainstream activity that one can safely view the company’s results as a proxy for consumer economic activity in the U.S.
From clothes to shoes to wireless phones to video games and electronics — Amazon sells them all and can accurately track the spending sentiment amongst its buyers. The company does publish some data occasionally, but what would be even cooler was if Amazon published its own “state of the economy” report every month, which would contain data that’s both more current and more accurate than some of what’s collected and published by governmental organizations.
With undoubtedly the best data in the world when it comes to purchasing habits, Amazon is capable of building an advertising platform that could compete with Google.
And it looks like Amazon may be making progress on this front. Maveron Senior Associate Eric Monsowitz recently announced that he is leaving the Seattle Venture Capital firm to join Amazon to help them build out a top-notch online advertising platform and they continue to actively recruit for their Global Online Display Advertising division.
Should Google be worried?