Amazon trots out YouTube-sized advertising business

2 minute read

The logo of Amazon is seen at the company's logistics center in Bretigny-sur-Orge, near Paris, France, December 7, 2021. REUTERS/Gonzalo Fuentes/File Photo

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NEW YORK, Feb 3 (Reuters) - Amazon pulled the veil off its sprawling advertising business for the first time on Thursday, revealing a business larger than that of Google's YouTube.

Amazon reported ad revenue of $9.7 billion for the fourth quarter, up 32% from last year, and $31 billion for the year. read more

YouTube posted $28.8 billion in ad revenue for 2021.

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Analyst Benedict Evans on Twitter said that made Amazon's ad revenue similar in size to the entire global newspaper industry, and Statista put global newspaper annual ad spending at $29.5 billion.

Amazon, known for e-commerce, has a lucrative cloud business, AWS, and the ad business is seen as extremely profitable, although Amazon did not break out those profit numbers.

Amazon serves ads on its website and wake screens of some of its tablets, using search queries by its customers to help target ads. Those ads are often by companies selling on its marketplace.

"Selling digital add space is a cash generative nice-to-have in times of uncertainty," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.

Meta Platforms Inc (FB.O) shattered confidence in the online advertising industry on Wednesday, saying privacy changes by Apple Inc (AAPL.O) had made it harder for advertisers.

An Amazon official however told reporters that brands' ability to reach consumers across its ad properties was "largely unchanged" after Apple's changes.

Lund-Yates saw Amazon's ad business more in line with Google parent Alphabet (GOOGL.O), which also has its own data about customers from its search system, and shrugged off the Apple changes.

Amazon's ad revenue growth has been decelerating from 88% in the second quarter. But the totals also make it larger by sales than Pinterest (PINS.N) and Snap (SNAP.N), which also reported strong results on Thursday.

Pinterest posted revenue of $846.7 million for the fourth quarter and Snap reported $1.3 billion. read more

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Reporting by Danielle Kaye; editing by Peter Henderson and Chris Reese

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