Tomahawk, WI 09/30/2014 (Basicsmedia) – Amazon.com, Inc. (NASDAQ:AMZN) relationship with Google Inc. (NASDAQ:GOOG) could become more adversarial in the coming months as the latter is reportedly trying to venture more into digital advertising. During an interview on CNBC, Pacific Crest analyst, Chad Bartley, reiterated that Amazon has the potential to compete against Google as it has unique shopping data that it could use to its advantage.
“The industry contacts that we have talked to in the last few months have indicated that they are the sleeping giant. They are a juggernaut in the industry. They are sitting on very valuable consumer data in terms of how they shop what they look for and most importantly what they buy on Amazon,” said Mr. Bartley.
Bartley argues that consumers transaction data on Amazon.com, Inc. (NASDAQ:AMZN) shopping platform could be extremely valuable to advertisers and marketers in carrying out effective targeted advertising. Bartley believes that Amazon’s purchase data from consumers is more valuable than Google’s data as it would go a long way in giving marketers a clear view of what consumers are yearning for in terms of products.
Amazon.com, Inc. (NASDAQ:AMZN) has the potential to increase its ad revenue to $1 billion according to Bartley as it is one of the giant players in e-Commerce. Its unique data would also go a long way in attracting more advertisers who are looking for more reach and flexibility than what other advertising platform are offering at the moment. The entry of more players into advertising is expected to result in price wars expected to have an impact on commoditization.
Amazon.com, Inc. (NASDAQ:AMZN) has been grappling with declining profit margins for the better part of the year, a trend the analyst expects to change with the ongoing aggressive push for advertising.
“We think it is a multi-billion dollar revenue opportunity for them even four years out at single digit percentage revenue obviously not that big. However, it is very high operating margin so roughly 40% potentially we think that they will clearly invest a majority of those incremental profit into other opportunities,” said Mr. Bartley.