Amazon has been slowly building an adtech business for the past few years now. Back in 2008 I wrote about the launch of their advertising network and since then there has been a steady trickle of announcements and hires that show they are getting more and more serious about becoming a player in the adtech market. The pace of announcements seems to have picked up a bit recently and this morning the FT ran an article entitled Amazon opens up new advertising front.
Their big hope, of course, is that the proprietary data they have about shoppers on Amazon will allow them to target ads much better than their competition. I hope they are successful, because right now Google stands pretty much unchallenged as the only major tech player in the adtech space, which limits partnership and exit options for startups. When we invested in buy.at back in 2006 AOL, Microsoft, Yahoo and Google were all credible potential acquirers, and we spoke to all of them before ultimately selling to AOL, and I’m sure that the existence of those other players as alternative suitors helped us complete the AOL deal quickly and at a better valuation. Fast forward to today and Google is the only player left on that list that makes regular adtech acquisitions, which is why I hope that Amazon will enjoy enough success with their advertising products to want to step up and provide some competition for them in M&A.
There is also a sliver of good news on this front from Yahoo today. Their Q4 results showed an improvement in their search advertising business and Marissa Mayer has said that she wants to take back some market share in search from Google. I have nothing against Google, but once again, I hope they succeed.