52 Bicycles

Amazon.com Associates is clever stuff. Just joined, been looking into it (will have some links to my favorite biz books up soon). The setup is very clever, and I think this is a very cool way for a sophisticated web service to start making money. A huge store with a variety of potential fulfillment, and one can drive transactions, as opposed to merely traffic or impressions. A service can use the information collected about the user to offer items that are really relevant to their interests - and monetize at a far better rate than, say, Adsense.

It’s harder, because it’s largely up to the service to figure out which books to offer (though it can just feed keywords into Amazon to come up witha list) but it looks far more lucrative.

This kind of direct-transaction affiliate program feels much stronger as a revenue model, especially because it allows a service that has lost the “get big” race to make good current income, and validate as a business perhaps even more profitably than the “big” guy. The differentiation is now how much data you have on the user and how cleverly you can use it to give the user what he/she actually wants, rather than yet another ad about mesothelioma. At the end of the day, it creates a viable business that may also be a better acquisition candidate - by an amazon or other institution that lives on transactions. (See IMDb)

This entry was posted on Tuesday, February 28th, 2006 at 3:01 pm and is filed under Technology Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Reddit This