Amazon.com, Inc. (NASDAQ:AMZN) is reportedly developing a Google Inc (NASDAQ:GOOGL) AdWords like advertising software. Amazon has already tested the waters with a small ad business on other websites and is making plans to expand the model by employing newer and better ads. While Google is clearly the current market leader in the advertising world, such software from Amazon could give the former stiff competition as the online retailer has a huge supply of consumer data waiting to be tapped into. This tool is touted to be Amazon’s answer to marketing programs offered by Google and Microsoft Corporation (NASDAQ:MSFT).
Not many online advertising options available for marketers of today
While the number of people resorting to online shopping has grown exponentially, there are only a handful of platforms such as Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) available today for marketers to advertise their products to this vast clientele.Amazon.com, Inc. (NASDAQ:AMZN)’s foray into the targeted advertising business could lend some respite to people looking to promote their products to a wider audience. As Amazon already knows what people are searching for, it is better suited to show ads based the user’s preferences and search history.
Amazon.com, Inc. (NASDAQ:AMZN)’s path ahead not a bed of roses
Though Amazon.com, Inc. (NASDAQ:AMZN) has some expertise in the area of online advertising, it will face huge roadblocks in the path to advertising glory if it wants to overthrow the current leader Google Inc (NASDAQ:GOOGL). Taking a slice out of Google’s $50 billion-a-year pie does sound quite lucrative, but Amazon has other motives driving its goal to enter the online advertising world. Google controls the pricing of its keyword ads on Amazon’s website. Having its own advertising platform enables Amazon to garner more revenue and better profit margins. Besides, Amazon might be losing potential data from customers when they click on a Google ad on its website as the data of such transactions are captured by Google.