Amazon’s advertising revenue surges by 24%

Adverts during Amazon Prime shows and movies have helped the tech firm exceed predictions for sales and profit.

Boosted by Amazon Prime Adverts: 

In the first quarter of this year, Amazon experienced a remarkable 24% increase in advertising revenue compared to the previous year. 

This surge was largely driven by making Amazon Prime adverts the default option for many customers, enhancing the company’s advertising reach.

Cloud Services and Prime Delivery: 

Additionally, Amazon’s cloud services and its fastest-ever Prime delivery times contributed significantly to the positive results. CEO Andy Jassy hailed this performance as “a good start to the year,” expressing excitement about the future prospects of the company.

Expansion Beyond Online Retail: 

From its origins as an online shop, Amazon has diversified into various business areas, including online television and film streaming. 

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Prime membership now offers benefits beyond fast delivery, such as access to exclusive content, with adverts becoming the default option for members in select countries.

Union Concerns and Employee Wellbeing: 

However, Amazon’s drive for speed, particularly in delivery services, has faced criticism from unions and employee groups. 

Concerns about the impact on employee wellbeing have been raised, with some arguing that the company’s relentless pursuit of efficiency can come at a cost.

Cloud Service Growth Exceeds Expectations: 

On the cloud service front, Amazon reported revenue growth that surpassed analysts’ expectations, attributing it to the reacceleration of its growth rate driven by AI capabilities. Amazon Bedrock, the company’s AI service, has seen widespread adoption globally.

Sales Guidance and Share Price Dip: 

Despite the positive results, Amazon’s share price experienced a 3% dip following the earnings report.

This was attributed to the company’s sales guidance for the next quarter, which fell below analysts’ forecasts. Amazon predicted revenue growth between 7% and 11%, slightly lower than anticipated.