It's confusing to me that amazon is in the ads business at all though. They're a retail service, not an ad business and it seems that all the ad business does is burn goodwill. They do have goodwill to burn, but it cheapens the entire experience.

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GuB-42 3 hours ago | parent | next [-]

How is it confusing? Most brick and mortar stores show ads for specific products. Online platforms other than Amazon do it too.

The only thing is that Amazon is more diversified than other retailers, in particular, they have AWS, essentially selling the platform that runs their website to third parties. It makes sense for them to offer sell their ad service to third parties too.

	▲	marginalx an hour ago \| parent [-]
		No one does it like Amazon, it requires users to walk through the sponsored ads before they can see organic search results, almost no other platform does this online. Walmart has a single strip of sponsored results at top, immediately leading to organic results, others like Target, HomeDepot do not mix in sponsored results with search results. B&M is different, Ads are there, but you aren't forced to look at them like Amazon does.

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zahlman 2 hours ago | parent | prev | next [-]

How does the saying go, again? "You may not be in the ad business, but the ad business is in you"? Something like that? That sounds wrong, but sometimes it seems like the double entendre may as well be the reality.

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jonahx 3 hours ago | parent | prev [-]

Per the article, in exchange for that goodwill they get a billion dollars per week. Do we need more explanation?

To be clear, it's gross, but they are doing it just enough that their convenience and average sufficient product quality keeps me using them. I'd guess they do a lot of research to keep that balance where it is.

	▲	andrewla 2 hours ago \| parent [-]
		I don't expect to get any sort of explanation from Amazon of course. I do think they are probably doing something that is hurting them financially. Acquired goodwill is extremely hard to measure and shows up in things like long-term customer retention and engagement, so you're not going to see it on an A/B test -- on a A/B test users come in with the same level of goodwill on both sides of the fork and thus their immediate behavior is not going to be dictated by this. In many ways this is symptomatic of larger trends in society and managerial culture of looking for ways to measure things rather than confronting the messy subjective non-measurable reality. The only time we'll get a true counterfactual is when a competitor arises who can meet Amazon's very high bar for logistic excellence but can offer a more appealing interaction, and then Amazon retail will die off without anyone understanding how or why it happened.