Google Inc (GOOG): Amazon.com, Inc. (AMZN) Knows Something

The company has built powerful algorithms to analyze consumer behavior and make recommendations, that´s why it recommends buying batteries when you purchase a toy on Amazon.com, Inc. (NASDAQ:AMZN), for example. Amazon has internally benefited from these technologies for years, and now it has the opportunity to capitalize this know-how by expanding into advertising.

Over the past year, the company has built a real-time bidding platform that plugs into exchanges and supply-side platforms, including Google Inc (NASDAQ:GOOG)’s AdX and PubMatic. This platform lets the company retarget its users across the web based on their browsing and purchase habits on Amazon.com, Inc. (NASDAQ:AMZN)’s owned and operated websites.

It´s hard to tell how much money Amazon is making from this business, but the long-term potential is certainly interesting. Besides, online advertising is a high-margin business, so it could be quite beneficial to the company now that profit margins have collapsed due to aggressive investing and increased expenditures for long term growth.

Bottom line

Amazon.com, Inc. (NASDAQ:AMZN) has tracked the browsing and shopping habits of millions of customers on its own websites for years, and it has developed state of the art algorithms to make the right product recommendations to those customers. Now, it’s capitalizing its data and technologies to buy ad inventory more efficiently and serve ads to the right consumers in the right place and the right time. The online retailer has the potential to make a killing in advertising.

The article Amazon Could Make a Killing in Advertising originally appeared on Fool.com.

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