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Unredacted details from an ongoing lawsuit show the Federal Trade Commission (FTC) claims Amazon tripled advertising prices for sellers during its biggest shopping days. The regulator also alleges that Amazon misled advertisers about why these costs were rising.
Advertising is one of Amazon's most profitable businesses, but it relies on a healthy relationship with the third-party sellers who pay for those ads. If regulators prove that Amazon is using its power to unfairly hike prices, it could lead to stricter rules on how the company runs its marketplace or even forced changes to its fee structure.
Source: WSJ
Amazon is rolling out a way for Alexa users to shop using text. While Alexa is known for voice control, this change lets people interact with the assistant through a chat interface to find and buy products.
This is a step toward making Alexa a more capable shopping agent. By adding text, Amazon makes it easier for customers to manage complex orders or shop in quiet environments, which could help the company capture more sales that currently happen through traditional search.
Source: Reuters
Amazon is planning to build its first data centers in Washington state, with new sites proposed for Walla Walla County and the Tri-Cities area. These facilities house the thousands of servers needed to run AWS, the company's cloud computing arm. While local residents have raised some concerns about the projects, the expansion is part of a much larger plan to keep up with the massive demand for AI and cloud services. Building closer to home helps Amazon expand its infrastructure, though these individual sites are just a small piece of its global network.
Source: GeekWire
Amazon is partnering with Uber to offer Prime members free delivery on restaurant orders of $25 or more. The service will be available directly inside the Amazon shopping app, making it easier for users to order food without leaving the company's ecosystem.
This move adds more value to the Prime subscription, which helps Amazon keep customers from switching to rivals like Walmart. By folding food delivery into its own app, Amazon also gains more data on how its 200 million members spend their money outside of traditional retail.
Source: Business Wire
The head of Amazon Web Services, the unit that provides computing power and storage to other companies, expects revenue to grow by more than 40 percent annually over the next two years. This would be a significant pace for a business that already brings in tens of billions of dollars each quarter.
This growth depends on Amazon spending heavily to build the data centers needed to run AI software. While that spending is expensive, the company believes it is necessary to meet a surge in demand from customers who are moving beyond testing AI to using it for their daily operations.
Source: Bloomberg Technology
Management has mostly outrun its own targets for two years. While the recent miss on profit shows the cost of building for AI, the long-term trend suggests they set bars they can reliably clear.
| Expectation | |
|---|---|
| EPS | $2.42 |
| Revenue | $244.90B |