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?
Google's mission is to organize the world's information and make it universally accessible and useful. As a first step to fulfilling that mission,... [more]
Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest... [more]
Why should Amazon, one of the few internet companies that sells and delivers more than electrons (though they sometimes take electrons back! ) get into the world of spam-vert... correction, advertising?
Perhaps the nearness of Kindle to Brindle suggests that they are going to get teleport hard goods. I hope the aren't any flies in the transporter!
I'm also confused as to the reason why Amazon would start an online advertising platform.
When you sell everything under the sun, don't you want people to stay on your site?
If Amazon offers an advertising platform to share revenue with a global network of retail sites that display their ads, it would create a huge potential for gain.
Interesting post!!! Even thought Amazon started their advertising plat form, people have still stayed on Amazon. At the same time Amazon is earning a lot of money form advertising!
Oh it’s really nice blog about online advertising. Online marketing is really gaining rapid popularity. To promote our site or product we have to do advertising so that people should know about it. Even i used to promote my site and sell my product online through full servicead and my business is really growing. Thanks for this Nice post.
