Amazon ad business could be 20 billion by 2020, analysts say

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5.4.2018

Amazon's nascent advertising business could be worth around $20 billion in 2020 as it challenges the likes of Google in search, one analyst says. 

Alex DeGroote, a media analyst at Cenkos Securities, estimates that North America's advertising market represents about 40 percent of the global total or around $200 billion currently. He said Amazon is about $3 billion of this now, amounting to around a 1.5 percent market share. Given the growth DeGroote is expecting by 2020, Amazon could soon have an $8 billion share in North America, and globally that would equate to $20 billion.

Amazon's strength would be in search advertising rather than display, according to DeGroote. This is because of the massive amount of products it lists on its platform. Potential companies that sell through Amazon could pay the e-commerce giant to have their products featured prominently when someone searches for something.

 "I think Amazon will do retail search and take Google to the cleaners on retail search using their estate," DeGroote told CNBC in a recent phone interview. "Slowly over time you will use Amazon as your retail search engine rather than Google."