Amazon is seldom in a rush to disclose its business

Amazon, admirably speedy in deliveries, is seldom in a rush to disclose anything new about its business. It took years of wrangling with investors before the company broke out the numbers for its Amazon Web Services cloud business… However, investors — and customers bombarded with new sponsored products — have started to notice there is a sizeable advertising business at Amazon. On Thursday, during first-quarter results, Amazon diverged a little from a well-worn script that advertising “enhances the shopping or viewing experience” to admit advertising is now a “multibillion dollar programme and growing very quickly”. The precise size and pace is hard to discern but Amazon does at least reveal that it is the majority of its “other” revenue line, which amounted to $2 billion in the quarter, or 4 per cent of net sales. That more than doubled year on year. The growth was flattered somewhat by a shift in accounting, but Amazon disclosed that the underlying growth was a still-mighty 72 per cent. So advertising should bring in about $10 billion this year, almost half the size of AWS, which continues to benefit from the boom incloud computing… There are reasons for caution. Amazon risks spoiling rather than “enhancing” the shopping experience if it over-promotes paying ads. At least in talking about its newly powerful additional business, though, Amazon appears ready to advertise the fact.