My Brain Food This Week...

Sep 15, 2023

(Trung Phan)

Key takeaways:

Big Tech companies, such as Apple and Alphabet, have developed multi-billion dollar revenue streams from side businesses like wearables and YouTube
Amazon's advertising business has become a massive success, with an annual revenue run rate of approximately $43 billion as of Q1 2022. This surpasses the combined revenue of several major tech platforms, including Bing, Snap, Twitter/X, Pinterest, and TikTok.
Amazon's shift toward embracing advertising marks a significant change from its original position on ads, as it initially focused on personalisation through recommendation algorithms rather than advertising.
The man leading Amazon's ad business, Paul Kotas, has a strong technical background and joined Amazon in the late 1990s, despite reservations, due to his prior working relationship with Jeff Bezos.
Amazon's advertising business has the potential to become its most profitable, as it leverages its valuable first-party transaction data. This pivot into digital advertising mirrors a broader trend among companies with substantial first-party data assets, challenging traditional advertising norms and business models.

Self-Taught MBA