To move prices even lower, Amazon.com may extend its already-powerful advertising into new and existing places, both advertising their own site and the sites of others.
It's difficult enough to compete with Amazon.com in terms of pricing lately. In fact, Best Buy lost millions after establishing a price match guarantee in order to compete with Amazon. But Amazon may be raising the bar again through some clever advertising tactics. Not only could Amazon place advertisements for its own store across the web, it could actually bring in revenue by providing advertisements for others as well. Kristin Mariani, an Amazon spokeswoman, stated that the end-goal was to make Amazon.com store items cheaper. "It's something that over time could help us lower prices for the consumer."
Amazon.com could be breaching a new market that is already well-worn by Yahoo, Microsoft, Google and others. But if the company gets an edge in the ad-selling market, it could significantly boost Amazon's existing revenue potential and allow the companies to further lower prices of their store items. One reason why Amazon may have this advantage is user information. Not only does Amazon own the basic user demographics from sales, but they also have past purchases information which they can utilize in order to build profile types, and respond with ads accordingly. However, this is always a fine line to tread between convenient and persuasive targeted ads, and those which make users feel as if they are being stalked. If Amazon could find this balance, the company might be on to an extremely profitable new venture.
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