Is Amazon Eying the Online Advertising Market?

The Wall Street Journal reports that Amazon may replace third party ads on its websites with a new in-house ad platform. Experts say that Amazon is a "sleeping giant" in the industry because it has a large amount of rich consumer data but has not fully leveraged it for advertising.

For Amazon, more advertising offers the prospect of more revenue and potentially higher profit margins. Amazon remains primarily a retailer, buying goods from suppliers and selling them to customers with small markups. The company operates on notoriously thin profit margins, and frequently posts losses, as it invests for expansion.

Google's ad-supported business is highly profitable. It generated more operating profit in the first six months of this year than Amazon has since it was founded 20 years ago, according to researcher S&P Capital IQ.