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Google: Total Rev: 70B, ads:57B, cloud 6B. Amazon: Total rev: 116B Ads: 31B cloud:71B It's reasonable to say that Google's biggest threat is Amazon's ad bus

Google: Total Rev: 70B, ads:57B, cloud 6B. Amazon: Total rev: 116B Ads: 31B cloud:71B It's reasonable to say that Google's biggest threat is Amazon's ad business. And instagrams not far behind.

adam_arthur 4y ago
Aren't Amazon ads just sellers prioritizing their listing on the Amazon page? Seems totally different from the ad market for Google
- xyzzyz 4y ago
  Aren't Google ads just businesses prioritizing their listings on Google search page?
  - adam_arthur 4y ago
    Who will advertise a concert or any various services on Amazon? Or a restaurant? A conference? Very niche focus for Amazon vs broader set of customers for Google ads. Seems totally different to me
    - kevinsundar 4y ago
      Ecommerce sellers have higher margins (gross margin 40%) than the other services and businesses you mentioned. So they have more money to spend on Ads. Also Google competes with FB and has to split the advertising pie for those other services and businesses. Amazon owns basically the whole pie for the people who want to advertise products.
      - adam_arthur 4y ago
        E-commerce has terrible margins Amazon itself had negative operating margins for its retail business last quarter. Amazon retail: "Its U.S. segment recorded $206 million in operating losses, while the international side lost $1.63 billion." Single digit margins at best, once a market is competitive. Edit: You edited your above, but gross margin is meaningless. It doesn't even include salaries for employees or infrastructure costs. Net margins for retail will always be slim, outside of specific first mover advantage in some subsectors. You think the Chinese companies selling $5 rubber spatulas are making 40% margins? Lol, try 5% or less. The theory that Amazon retail would grow revenues rapidly and then eventually expand to high operating margins will never come to fruition. Margins will be below 10% in perpetuity But sure, ignore all costs of running the business and look at gross margins.
        kevinsundar 4y ago
        A quick search says 40% gross margins for e-commerce. So Income - COGS. Which is pretty damn high. Most of these sellers are selling cheap Chinese goods so I bet it's even higher on Amazon. And Amazon retail margins is way different and in no way comparable to SELLER margins.
        londons_explore 4y ago
        Amazon loses money on every sale, yet somehow they are far pricier than ebay (which is profitable), and that is far pricier than aliexpress. A quick sample of like-for-like products shows that typical sale+delivery price on amazon is 30% more than aliexpress and 18% more than ebay. I really don't see how you can charge 30% more than a profit making competitor, sell in larger volume, yet make a loss.
        deleted 4y ago
        [deleted]
    - oezi 4y ago
      Give it 5 years (3?) and they might just sell many of these. Concert tickets, restaurant bookings/take out aren't so hard to imagine. I think Amazon's ambition is endless.
    - vineyardmike 4y ago
      Many of my Amazon ads are for non products like financial services (specifically Amex)
  - stingrae 4y ago
    No. They are ads all over the internet through AdSense.
- alecb 4y ago
  Amazon has a pretty developed video and display advertising market for publishers called Unified Ad Marketplace; for our business, it's typically in second behind AdX/Adsense for revenue and impressions won. That said, I'm not seeing any revenue breakout from Amazon that specifies how much this side of the business makes.
next_xibalba 4y ago
Huh? Isn't the ecomm component of Amazon's "Total Rev" several hundred billion?
- HeyItsMatt 4y ago
  COGS is >70% of that number. Retailers typically subtract it before calculating gross margins.
  - next_xibalba 4y ago
    Sure but we're talking revenue, not gross margins.
abledon 4y ago
Amazon has PrimeVideo, BlueOrigin, Trucking Fleets etc... so diverse. What is google doing with all the cash its sitting on? Is Waymo their only bet? They definitely aren't innovating with youtube, 3rd rate copycat features like 'shorts' etc... poor livestreaming/chat design. Maybe they'll just end up buying rocketlab for their space project ...
- open1414 4y ago
  https://www.vox.com/new-money/2017/4/19/15357290/juicero-400-machine-hands https://www.vox.com/new-money/2017/4/19/15357290/juicero-400...
  - deleted 4y ago
    [deleted]
- rohitnair 4y ago
  Blue Origin is not part of Amazon.
  - abledon 4y ago
    Ok technically yes, but their IP is probably shared. For instance, Elon Musk has mentioned the Materials Science team he has works for all 3 companies Tesla,SpaceX,BoringCompany etc...
    - londons_explore 4y ago
      There are close Google <=> SpaceX links too... The Starlink backbone network uses Google Cloud features that appear custom built/aren't available even to big customers. Nearly all Tesla tech seems built on top of Google tech - for example they use various private maps API's for the in-car map display. And everything is built on top of protocol buffers, google's in-house RPC/serialization format.
      - donalhunt 4y ago
jsnell 4y ago
Your Amazon ads / AWS numbers look annual, the other numbers quarterly. Just what kind of conclusion are we supposed to draw from that?
deleted 4y ago
[deleted]
nym375 4y ago
I think you might be mixing quarterly and yearly numbers.
BlackJack 4y ago
Amazon Ads 31B is an annual figure. Last quarter it was ~8B. Same thing with cloud; AWS pulled ~18B last quarter. Amazon Ads is a legit threat to Google, especially with product searches. Instagram struggles to monetize commercial queries to the same degree as Goog/Amzn.
- impulser_ 4y ago
  I think Google is more of a threat to Amazon than Amazon is a threat to Google. Google Shopping and YouTube Shopping are going to eat away at Amazon being the go to place to do product searches.
spiantino 4y ago
Here are accurate numbers: Google Q2: 70B, ads: 57B, cloud 6B. Net profit: $16B Amazon Q1: 117B, ads: 8B, cloud 18B. Net profit: -$4B
lifeisstillgood 4y ago
OK - at 1am I should still do better data checking - apologies please ignore the whole thing

Google: Total Rev: 70B, ads:57B, cloud 6B. Amazon: Total rev: 116B Ads: 31B cloud:71B It's reasonable to say that Google's biggest threat is Amazon's ad business. And instagrams not far behind.

adam_arthur 4y ago

Aren't Amazon ads just sellers prioritizing their listing on the Amazon page? Seems totally different from the ad market for Google

xyzzyz 4y ago
Aren't Google ads just businesses prioritizing their listings on Google search page?
- adam_arthur 4y ago
  Who will advertise a concert or any various services on Amazon? Or a restaurant? A conference? Very niche focus for Amazon vs broader set of customers for Google ads. Seems totally different to me
  - kevinsundar 4y ago
    Ecommerce sellers have higher margins (gross margin 40%) than the other services and businesses you mentioned. So they have more money to spend on Ads. Also Google competes with FB and has to split the advertising pie for those other services and businesses. Amazon owns basically the whole pie for the people who want to advertise products.
    - adam_arthur 4y ago
      E-commerce has terrible margins Amazon itself had negative operating margins for its retail business last quarter. Amazon retail: "Its U.S. segment recorded $206 million in operating losses, while the international side lost $1.63 billion." Single digit margins at best, once a market is competitive. Edit: You edited your above, but gross margin is meaningless. It doesn't even include salaries for employees or infrastructure costs. Net margins for retail will always be slim, outside of specific first mover advantage in some subsectors. You think the Chinese companies selling $5 rubber spatulas are making 40% margins? Lol, try 5% or less. The theory that Amazon retail would grow revenues rapidly and then eventually expand to high operating margins will never come to fruition. Margins will be below 10% in perpetuity But sure, ignore all costs of running the business and look at gross margins.
      - kevinsundar 4y ago
        A quick search says 40% gross margins for e-commerce. So Income - COGS. Which is pretty damn high. Most of these sellers are selling cheap Chinese goods so I bet it's even higher on Amazon. And Amazon retail margins is way different and in no way comparable to SELLER margins.
      - londons_explore 4y ago
        Amazon loses money on every sale, yet somehow they are far pricier than ebay (which is profitable), and that is far pricier than aliexpress. A quick sample of like-for-like products shows that typical sale+delivery price on amazon is 30% more than aliexpress and 18% more than ebay. I really don't see how you can charge 30% more than a profit making competitor, sell in larger volume, yet make a loss.
        deleted 4y ago
        [deleted]
  - oezi 4y ago
    Give it 5 years (3?) and they might just sell many of these. Concert tickets, restaurant bookings/take out aren't so hard to imagine. I think Amazon's ambition is endless.
  - vineyardmike 4y ago
    Many of my Amazon ads are for non products like financial services (specifically Amex)
- stingrae 4y ago
  No. They are ads all over the internet through AdSense.
alecb 4y ago
Amazon has a pretty developed video and display advertising market for publishers called Unified Ad Marketplace; for our business, it's typically in second behind AdX/Adsense for revenue and impressions won. That said, I'm not seeing any revenue breakout from Amazon that specifies how much this side of the business makes.

next_xibalba 4y ago

Huh? Isn't the ecomm component of Amazon's "Total Rev" several hundred billion?

HeyItsMatt 4y ago
COGS is >70% of that number. Retailers typically subtract it before calculating gross margins.
- next_xibalba 4y ago
  Sure but we're talking revenue, not gross margins.

abledon 4y ago

Amazon has PrimeVideo, BlueOrigin, Trucking Fleets etc... so diverse. What is google doing with all the cash its sitting on? Is Waymo their only bet? They definitely aren't innovating with youtube, 3rd rate copycat features like 'shorts' etc... poor livestreaming/chat design. Maybe they'll just end up buying rocketlab for their space project ...

open1414 4y ago
https://www.vox.com/new-money/2017/4/19/15357290/juicero-400-machine-hands https://www.vox.com/new-money/2017/4/19/15357290/juicero-400...
- deleted 4y ago
  [deleted]
rohitnair 4y ago
Blue Origin is not part of Amazon.
- abledon 4y ago
  Ok technically yes, but their IP is probably shared. For instance, Elon Musk has mentioned the Materials Science team he has works for all 3 companies Tesla,SpaceX,BoringCompany etc...
  - londons_explore 4y ago
    There are close Google <=> SpaceX links too... The Starlink backbone network uses Google Cloud features that appear custom built/aren't available even to big customers. Nearly all Tesla tech seems built on top of Google tech - for example they use various private maps API's for the in-car map display. And everything is built on top of protocol buffers, google's in-house RPC/serialization format.
    - donalhunt 4y ago

jsnell 4y ago

Your Amazon ads / AWS numbers look annual, the other numbers quarterly. Just what kind of conclusion are we supposed to draw from that?

deleted 4y ago

[deleted]

nym375 4y ago

I think you might be mixing quarterly and yearly numbers.

BlackJack 4y ago

Amazon Ads 31B is an annual figure. Last quarter it was ~8B. Same thing with cloud; AWS pulled ~18B last quarter. Amazon Ads is a legit threat to Google, especially with product searches. Instagram struggles to monetize commercial queries to the same degree as Goog/Amzn.

impulser_ 4y ago
I think Google is more of a threat to Amazon than Amazon is a threat to Google. Google Shopping and YouTube Shopping are going to eat away at Amazon being the go to place to do product searches.

spiantino 4y ago

Here are accurate numbers: Google Q2: 70B, ads: 57B, cloud 6B. Net profit: $16B Amazon Q1: 117B, ads: 8B, cloud 18B. Net profit: -$4B

lifeisstillgood 4y ago

OK - at 1am I should still do better data checking - apologies please ignore the whole thing