Amazon has disclosed revenue from its fast-growing advertising business for the first time and in the fourth quarter of 2021, its advertising services grew 32 percent (on-year) to $9.7 billion globally.
Previously, Amazon included advertising revenue in its “other” business segment.
“We are now separating advertising services revenue from other revenue as part of our revenue disclosures by groups of similar products and services,” said Brian Olsavsky, Chief Financial Officer (CFO), Amazon.
“It had been the majority of other revenue. We’re very happy with ad growth. It continues to drive value,” said Olsavsky.
Amazon is now third in the US market, behind Google and Facebook, in advertising growth.
While Google reported ad revenue of $61.2 billion in Q4 2021, Facebook reported ad sales of $32.6 billion in the same period.
Amazon on Thursday said its revenue climbed 9 percent in the fourth quarter to $137.4 billion, and the eCommerce platform gained nearly $12 billion from its investment in electric vehicle company Rivian.
Amazon Web Services (AWS) added more revenue year over year than any quarter in its history.
“It is now a $71 billion annualized run rate business, up from a $51 billion run rate one year ago. Even on a large base, revenue increased 40 percent year over year,” said Olsavsky.
The fourth-quarter operating income was $3.5 billion for Amazon.
The company said that lost productivity and network disruptions were driven primarily by labor capacity constraints due to challenges in staffing up its facilities for the peak.
“This is driven by the very tight labor market in the second half of 2021, and more recently, by the emergence of the Omicron variant. We do expect these cost challenges to persist in the Q1, albeit adjusted for lower seasonal volumes relative to the fourth quarter,” Olsavsky noted.
