5 Things We Learned During Amazon’s Earnings Call That Weren’t Free One-Day Shipping

These may have gotten a little overshadowed

Amazon is buying the second most commonly adopted ad server in ad tech.
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Free one-day shipping dominated the conversation during Amazon’s quarterly earnings call Thursday, but it wasn’t the only takeaway.

Here’s what else we learned:

1. Amazon Advertising will provide more intel.

Brian Olsavsky, senior vice president and chief financial officer, would not address questions about ad loads and inventory but said Amazon is experiencing “good advertising growth” in North America and abroad, with revenue growth “a bit higher than” 36% in the quarter. The platform is focused on “driving relevancy [and] ensuring that we service the most useful ad as possible,” he added.

Sales of advertising services and sales related to other service offerings totaled $2.7 billion.

That includes adding products and functionality like making better recommendations, making it easier to use its demand-side platform and adding reporting for advertisers “so they can understand the incremental customers they’re seeing on Amazon through advertising with Amazon.”

2. Prime members like streaming, but we still don’t know how many there are.

Olsavsky said more consumers signed up for Prime in 2018 than any other year but didn’t provide specifics. He answered a question about churn by citing hours spent on Prime Video and Prime Music, which “are trending in the right direction and continue to get more and more sticky.”

Dave Fildes, director of investor relations, said Amazon will continue “to invest meaningfully in digital video,” following hits like Homecoming, Jack Ryan, Hanna and Guava Island.

3. Third-party sellers will love one-day shipping, too.

Amazon will foot the bill for one-day shipping, which Olsavsky called “a direct benefit to sellers.”

Despite deceleration in Amazon’s third-party seller business—Olsavsky attributed this to “the total sales of the customer”—he insisted the platform is committed to its third-party sellers.

“If we’re delivering on [selection, price and convenience], we’re indifferent as to whether it’s sold by us or a third party,” Olsavsky said.

4. Everything is fine in India.

Days after reports it plans to close its marketplace in China, Amazon said it had to “make some changes to our structure to stay in compliance with all regulations” in India, including the PN2 ruling, which prohibits entities tied to ecommerce platforms from selling on the site and limits how much one retailer can sell in a given channel. This resulted in what Olsavsky called “some downtime” in India, but he also said “the impact was minimal” on Q1 and Amazon is “very, very happy with the progress of the business in India.”

5. AWS remains a cash cow.

AWS brought in $2 billion more in revenue in the first quarter of 2019 than the period a year prior. That included customer wins like Volkswagen, Ford, Lyft and Gogo.

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