The disclosure follows years of Amazon investing in the advertising business and keeping details private.
At that scale, it’s larger than several other entities in online advertising, including cloud rival Microsoft
, whose CEO, Satya Nadella, disclosed last week the company’s 2021 advertising revenue exceeded $10 billion. Snap’s total revenue came to $4.12 billion in 2021, while that number was $2.58 billion for Pinterest.
Advertising is still small by Amazon standards, representing 7% of total revenue in the fourth quarter, according to the company’s earnings statement. Advertising gives Amazon twice the revenue that physical stores do, and it’s more sizable than the company’s subscription services, which icnlude Prime memberships.
“I’m excited to continue innovating in areas like sponsored ads, streaming video, and measurement,” Brian Olsavsky, Amazon’s finance chief, said during a conference call with analysts. “Of course advertising only works if we make it useful for customers. When we create great customer experiences, we build better outcomes for brands.”
Amazon had not told investors to expect information on the size of its advertising operation, which puts ads in product listings and search results and the wake screens of Amazon Fire tablets. That makes the news more surprising than when Amazon in 2015 started reporting revenue and operating income from the Amazon Web Services cloud division, which now represents about 13% of overall revenue.