TECH in AMERICA (TiA)

SHARING AMERICA'S TECH NEWS FROM THE VALLEY TO THE ALLEY

Amazon Is Quietly Building an Ad Empire

by Olga Kharif, courtesy Bloomberg

Amazon.com shows ads to many users of its Kindle e-readers. Photograph by Will Ireland/Future Publishing via Getty Images

Amazon.com shows ads to many users of its Kindle e-readers.
Photograph by Will Ireland/Future Publishing via Getty Images

Google and Facebook tend to make the most noise in digital advertising. Amazon.com is a bit of a silent giant, and the online retailer is starting to stir.

Last year, Amazon’s advertising revenue increased 46 percent from 2011, reaching $610 million, according to a report published today by researcher EMarketer. As Amazon’s ad efforts ramp up, the company’s worldwide ad revenue are estimated to increase another 37 percent this year to $835 million, the report said.

“Our financial disclosures are included in our quarterly earnings statements, and advertising revenue is reported in the ‘Other’ revenue category,” Kristin Mariani, a spokeswoman for Amazon, said in a statement.

While Amazon declined to discuss the performance of its ad unit, the company’s “other” revenue last year totaled $2.52 billion, according to data compiled by Bloomberg from public financial statements. It’s a small portion of the company’s $61.1 billion in overall revenue, but the “other” category was up 59 percent from 2011.

Amazon serves ads on its websites and through its advertising network. The company has been ramping up its ad business recently. Earlier this year, Amazon let developers serve ads to Android apps as well as to Kindle devices.

Google, Yahoo!, Facebook and AOL accounted for nearly two-thirds of U.S. online ad spending last year, according to EMarketer. Amazon accounted for $450 million, a relatively tiny slice, the researcher said.

The bulk of Amazon’s ad revenue comes from the U.S., and it could reach $1.1 billion by 2015, EMarketer said. That would make Amazon’s projected growth to be more than double that of the overall U.S. online ad market.

The company that ate the world may have found its next meal.

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