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Amazon’s $4.6 billion U.S. digital ad business surpasses Microsoft

Amazon’s advertising business is likely to more than double its sales in the U.S. this year, a market researcher said Wednesday, a jump that would place the company behind only Google and Facebook.


The Seattle company’s U.S. digital advertising business will likely bring in $4.6 billion in 2018, from an estimated $1.8 billion a year ago, eMarketer said in a forecast Tuesday.


Amazon doesn’t break out sales from advertising, which it reports alongside other lines of business in an “other” category on its financial reports. That segment recorded $2.1 billion in sales during Amazon’s most recent quarter, more than double the year-earlier figure.


Amazon has sold ads on its retail websites, and against specific product search results, for years. But that business began to take off recently alongside a perception among some ad buyers that Amazon, with its trove of data on what people buy, can help them more precisely determine whether people actually parted with their cash after seeing an advertisement.


“People are switching much of their purchasing to online channels, which Amazon is of course driving and benefiting quite heavily from,” said Monica Peart, senior forecasting director with eMarketer. Amazon is also reaping the rewards of an increase in product searches started on the retailer’s website, instead of on Google or another search engine, she said.


The big search engine retains the upper hand, however, a member of a duopoly that takes in more than half of all the cash spent on ads on the internet.


Google will take in $41 billion in digital ad revenue in the U.S. in 2018, eMarketer estimates, and Facebook $22.8 billion.


Amazon comes in at third place, just ahead of rival Microsoft, which, including its LinkedIn professional social networking arm, will post digital ad revenue of $4.5 billion this year, eMarketer estimates. In fifth place is Oath, the Verizon-owned grouping of AOL, Yahoo, and other early web stalwarts that will take in $3.6 billion.

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