Amazon's Advertising Business Is 'Going To Grow Significant Scale,' Says Mark Douglas: '...And Be Very, Very Profitable'
Amazon.com Inc. (NASDAQ:AMZN) is set to significantly scale up its advertising business, according to MNTN CEO Mark Douglas.
What Happened: Douglas shared his opinion about Amazon’s growing focus on performance advertising on its homepage and in Amazon Prime, during CNBC’s “Last Call” on Tuesday. This strategy, Douglas said, was previously employed by Google and Meta.
“It [Amazon’s advertising] in itself is creating a huge business that is differentiated from all the other advertisers and it’s going to grow significant scale and be very, very profitable,” he said.
Why It Matters: Amazon’s first-quarter earnings report indicated net sales of $143.3 billion, a 13% increase year-over-year. The net sales total surpassed the Street consensus estimate of $142.5 billion.
Amazon’s CEO Andy Jassy expressed optimism about the future of Amazon Web Services (AWS) during the earnings call. Jassy highlighted the potential for AWS, stating that despite the segment's $100 billion-plus annualized revenue run rate, over 85% of the global IT spend is still on-premises.
Price Action: Amazon’s stock closed at $175.0 on Tuesday, down by 3.29% from the previous close, according to Benzinga Pro. However, the company’s Q1 GAAP earnings per share (EPS) of $0.98 surpassed the estimated $0.78, indicating a strong financial performance.
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