In a recent article on The Wall Street Journal the revenue and market share of the digital giant, Amazon, is being analyzed. The article states that Amazon will take No. 3 ranking on the top U.S digital ad sellers and generate $4.6 billion in revenue. The reason for this is because Amazon is not only selling products, they allow others to sell products on their site, and to buy advertisements on the site.
Amazon is a cloud computing and e-commerce company. It started as an online bookstore and continued to broaden its market and products. The company now sells its own electronics. The more traffic gets the more amazon makes on its own products as well as how much they can price advertisements. Companies are willing to spend heavily on advertisements on Amazon because if they are also selling products on the website they know the ad will reach its target consumer.
So where is Amazon headed? As Amazon penetrates the digital ad market and e-commerce market they are also moving into the healthcare space. Amazon has made steps to begin selling healthcare equipment while also hoping to make changes to health insurance offered in the United States. Amazon has partnered with BerkshireHathaway, and JPMorgan Chase to challenge employee healthcare naming Dr. Atul Gawande , a general and endocrine surgeon at Brigham and Women’s Hospital in Boston, and maybe best known for his work writing about health care for The New Yorker, as CEO of the merger. This is a huge move for the already thriving company. Healthcare is currently being highly scrutinized and dissected by the public and politicians. Therefore, the collaboration has the potential to make an important and well-needed impact on healthcare offered to employees. CBS insights report points out
“By teaming up with JPMorgan and Berkshire Hathaway, Amazon now has an additional pool of more than 1.2M employees — diverse in socioeconomic status, geography, and age, among other factors — to test its products on before releasing them to the public. This could be helpful when searching for solutions that work for both specific use cases (e.g. chronic disease management) and population demands (e.g. pharmaceutical delivery).” After the announcement the Amazon’s entry, the healthcare market plummeted. This proves just how much power Amazon can have on pretty much any market.
Along with the collaboration to challenge employee healthcare Amazon has also acquired online pharmacy PillPack. A CBS Insights report also pointed out that Amazon’s reach is larger than ever. “The company has a direct distribution advantage to over 300m active customers, 100m Prime members, and approximately 5m sellers on the site, which could prove useful should it ever develop health solutions for small businesses.” Overall the move Amazon is making into the healthcare sector is going to be a challenge because it is so different than the e-commerce market they are used to; however, with the expertise of Dr. Atul Gawande, I think it will prove to be a strategic move and investment.