Amazon’s transaction data is especially meaningful to advertising, but it supports other business lines too. For this and other reasons, Needham applies a 1.5X value multiplier to any ancillary business Amazon gets into.
“The anchor tenant … is the ecommerce business,” Martin says. “That’s the Trojan horse that gets them in the home. Every other aspect of Amazon that is appended to that is worth more because it has a lower customer acquisition cost – because Amazon is already in the home.”
Also in this episode: Twitch’s audience of young men, Google’s reliance on travel advertising, big tech’s spending on worker conditions.