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Almost everything on Amazon is becoming an ad

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Re: Almost everything on Amazon is becoming an ad

#331

Post by texasbigdata »

throwaway5752 wrote: post #302
arcturus17 wrote: post #298

Earlier quoted context omitted.

Yea no I'm also left scratching my head. I've never heard of a methodology to attribute market cap portions to business units; eager to hear some clarification too.

It is a well-established concept called https://www.investopedia.com/terms/s/sumofpartsvaluation.asp . A company's value is estimated on net present value (npv) of its projected, discounted future cash flows. If a company has a large, stable subsidiary that is growing slowly but is cash flow positive and a very fast growing but money losing subsidiary, it makes more sense to value parent company as if both subsidiari…

Further, it’s often applied backwards. Some financial engineering self proclaimed wizard will claim “x+y+z=a and the stock is trading at b, and a>>b, therefore the conglomerate discount is too large so we can earn risk free profit (aka arbitrage) by breaking this company up and publicly listing x,y, and z as independent units”. See: Xerox, for example.

Typically in mergers, you see accretion due to the removal of duplicate functions on the cost side (you don’t need two HR departments for example), but sometimes you get negative credit if you’re a too big / too opaque / too confusing.

Re: Almost everything on Amazon is becoming an ad

#332

Post by InCityDreams »

sanitycheck wrote: post #246

My process for getting usable results on Amazon (.co.uk, presumably the others too): 1. Search for thing 2. Filter by department (necessary for 3) 3. Filter by Seller: only Amazon 4: Filter by reviews: 4 stars+ 5: Sort by price, Low > High 6: (Further filters as appropriate) 7: Look at only products with a high number of reviews 8: For every product, "See all reviews" and filter on "Verified purchase only" and "Show…

Fair and balanced. My last several purchases with amazon have been a breeze, and i will continue (especially as local shops are taking full advantage to up their prices for seemingly no good reason except 'there'sa crisis') I regularly kill cookies. Perhaps it's a .com thing as I'll take the healthcare route and search through .nl, .it, .de, .co.uk for the same item. And then pay from where i have my account.

Re: Almost everything on Amazon is becoming an ad

#333

Post by edgyquant »

marginalia_nu wrote: post #49
UltraViolence wrote: post #35

The article speaks of a tipping point and has aided in pulling it forward. Unlimited greed is what eventually sinks a company. We saw it with AltaVista in the '90's (when the search results were all ads) and Google is slowly repeating this opening a space for a competitor to jump into.

> Unlimited greed is what eventually sinks a company. We saw it with AltaVista in the '90's (when the search results were all ads) and Google is slowly repeating this opening a space for a competitor to jump into. I'm not sure this is a helpful characterization. Greed is also what helped the same companies get where they were before they went to shit. The problem is that you can only grow so far in a market before th…

No innovation got them where they were

Re: Almost everything on Amazon is becoming an ad

#334

Post by 0xcde4c3db »

maineldc wrote: post #184
i_am_jl wrote: post #56

Earlier quoted context omitted.

"Sold by Amazon" comingles identical SKUs from different sellers in their warehouses. Seller A sells real Product Z on Amazon. Seller B sells fake Product Z on Amazon. When you order Product Z that is "Sold on Amazon" you might get a real one provided by Seller A, or you might get a fake one sold by Seller B

I believe what you are saying is possible for “Shipped by Amazon” not “sold by Amazon”.

I believe your description was accurate before ca. 2015, but at some point they reportedly started making commingling the default even for "Sold by Amazon" items. Commingling isn't the only issue, either; there's still the problem of products for which Amazon was never an authorized retailer and so their listing/SKU may have been created to sell counterfeits in the first place. In any case, there have been multiple lawsuits specifically alleging that counterfeit items were "Sold by Amazon" [1] [2] [3].

[1] https://web.archive.org/web/20201125141347/https://www.forbe...

[2] https://www.courtlistener.com/docket/4495986/1/apple-inc-v-m...

[3] https://www.geekwire.com/2016/daimler-ag-sues-amazon-knockof...

Re: Almost everything on Amazon is becoming an ad

#335

Post by a123b456c »

fmajid wrote: post #325
arcturus17 wrote: post #298

Earlier quoted context omitted.

Yea no I'm also left scratching my head. I've never heard of a methodology to attribute market cap portions to business units; eager to hear some clarification too.

When Amazon had a market cap of $1.7T, $1T of that was from AWS. I don't remember what the source was for the estimate.

LMGTFY: https://www.google.com/amp/s/247wallst.com/technology-3/2022...

Not an authoritative source. No rationale given.

Re: Almost everything on Amazon is becoming an ad

#336

Post by arcturus17 »

throwaway5752 wrote: post #302
arcturus17 wrote: post #298

Earlier quoted context omitted.

Yea no I'm also left scratching my head. I've never heard of a methodology to attribute market cap portions to business units; eager to hear some clarification too.

It is a well-established concept called https://www.investopedia.com/terms/s/sumofpartsvaluation.asp . A company's value is estimated on net present value (npv) of its projected, discounted future cash flows. If a company has a large, stable subsidiary that is growing slowly but is cash flow positive and a very fast growing but money losing subsidiary, it makes more sense to value parent company as if both subsidiari…

Yes I understand NPV and DCF but not OPs point. The eCommerce arm makes a lot of money so I don’t understand how you could come to the conclusion that its present value is zero.

Re: Almost everything on Amazon is becoming an ad

#337

Post by hubraumhugo »

chrisan wrote: post #181

I don't mind the ads, they are clearly labeled "sponsored". What I hate is all the fake reviews influencing my choice. You buy something highly reviewed then receive some giftcard/offer or something in the packaging saying to leave a review and get something in return. Now I have to "reddit productX" and read there before making a choice.

We're building a product research engine with Reddit's favorite products in one place: https://looria.com/reddit/overview

Re: Almost everything on Amazon is becoming an ad

#338

Post by robocat »

s17n wrote: post #285
fmajid wrote: post #244

Amazon is the third largest advertising company after Google and Meta. Its ad revenue is $32B (and growing fast, the run rate is $40B). That is half the revenue of AWS, which is worth 70% of Amazon's market cap. The inescapable conclusion is that Amazon's advertising is worth the remaining 30% of Amazon's market cap and Amazon's e-commerce arm is deemed worthless by Wall Street , its only purpose being to support the…

> The other inescapable conclusion is that whenever the quality of the shopping experience on Amazon and the needs of Amazon's advertising business clash, advertising will win (just as it has on Google). Saying that the e-commerce arm is worthless isn't really the right way to think about it - the ads business only exists to due the e-commerce product. Both Amazon and Google are well aware that their ad revenues depe…

Hard to know what fmajid means - although mentioning revenue is a serious black flag. Google’s search is a cost-centre and their advertising is a profit-centre. You could say Amazon is similar because in 2021 AWS made all the income and e-commerce made zero income[1].

I would be interested to see an analysis of income per business sector*, including their advertising sector, for Amazon. fmajid would need that information to be able to make the conclusions they drew.

From article: “After selling $31 billion in ads last year, Amazon became the third-largest online ad company in the United States”

Hard to know what this means, since we can’t know how much it “cost” Amazon for those ads (especially the cost of consumer dissatisfaction as the article mentions, and what is opportunity-cost?)

* and ideally assets per sector as well, plus a metric for internal capital reinvestment (VC style).

[1] https://www.investopedia.com/how-amazon-makes-money-4587523 Amazon unfortunately seems to only report on their segments: North America, International, and AWS.

Re: Almost everything on Amazon is becoming an ad

#339

Post by arcturus17 »

spoonjim wrote: post #322
arcturus17 wrote: post #298

Earlier quoted context omitted.

Yea no I'm also left scratching my head. I've never heard of a methodology to attribute market cap portions to business units; eager to hear some clarification too.

This is done all the time when pieces of businesses are bought and sold. It gets a little complex when the businesses are related (like Amazon Advertising and e-commerce, as opposed to Amazon e-commerce and AWS which are more fully independent of each other).

I understand approximating present value by discounting cash flows but not how you would come to the conclusion that the eCommerce business is valued at zero because the sum of AWS and ads make the total of the market cap.

Re: Almost everything on Amazon is becoming an ad

#340

Post by akomtu »

Amazon is certainly getting more scummy. Last time I made an order, it sneakily turned one item into a subscription (in a tiny font it said "the next arrival scheduled on...") and stopped showing cost of the faster delivery option it selected without asking me, i.e. it selected the 2nd option which is 3 days earlier, and that option had no price tag on it, only when I chose the slower option, it showed that the faster ootion is 10 bucks (on a 30 bucks item).

We are seeing how capitalism is advancing to its next phase: false advertising. Shorty after will follow another phase: extortion (uncancellable subscriptions, automatically signed legal agreements, etc.)

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