Amazon saw a 24% increase in advertising revenue in the first quarter of this year compared to the previous year. This growth was attributed to making Amazon Prime advertisements the default option for many customers during this period. Additionally, the company’s cloud services and fastest-ever Prime delivery times contributed to the positive results.
CEO Andy Jassy described it as a promising start to the year, although concerns have been raised by unions and employee groups regarding the impact of the emphasis on delivery speed on staff.
Jassy emphasized that it’s still early days for all of Amazon’s businesses and expressed enthusiasm about the future.
As one of the world’s largest companies, Amazon has diversified from its origins as an online retailer into various business sectors. This includes online television and film streaming, a benefit for Amazon Prime members alongside expedited delivery.
Adverts within shows and films became the default for Amazon Prime members in several countries, including the US and UK, starting in January and February. Members have the option to pay a fee to disable these adverts.
In the UK, adverts became default on February 5th, with a monthly fee of £2.99 to opt-out.
Meanwhile, Amazon boasted of achieving its fastest-ever delivery speeds, with 75% of packages in London, Tokyo, and Toronto delivered on the same day or the day after ordering.
However, unions in the UK and elsewhere have raised concerns about the impact of Amazon’s pursuit of speed on employee well-being. Amazon does not recognize unions among its UK workers, but Unite the Union argues for their necessity due to the demanding production targets set by the company.
Responding to union actions, Amazon has stated that it offers competitive pay and other benefits to its employees.
In other areas of the business, Amazon’s cloud service revenue exceeded analyst expectations, driven by the growth of AI capabilities.
Despite this positive growth, Amazon’s share price experienced a 3% dip after the results were announced, attributed to the company’s sales guidance for the upcoming quarter being lower than expected. Amazon projected revenue growth between 7% and 11%, falling short of analysts’ forecasts.
