Amazon is taking on Google with its own advertising program

Amazon plans to expand its small online ad delivery business enough to take on Google’s AdWords, according to a Wall Street Journal report. The company is developing a platform for delivering ads both on its own properties and other sites, potentially creating a significant new source of revenue for the e-commerce giant, the report on Friday said. The move could also reduce the number of Google-delivered ads on Amazon’s own site.

Amazon.com Inc. is gearing up to more directly challenge Google Inc.’s dominance of the online advertising market, developing its own software for placing ads online that could leverage its knowledge of millions of Web shoppers. Initially, Amazon plans to replace those ads on its pages that Google chiefly supplies with a new in-house ad placement platform, said people familiar with the matter. In the future, that system could challenge Google’s $50 billion-a-year advertising business and Microsoft Corp.’s, they added. The Seattle-based retailer already has a limited business placing ads on other sites. In a sign that it has larger goals, Amazon is testing ways to expand that program with new types of ads. “Amazon could use the data it has about buying behavior to help make these ads much more effective,” said Karsten Weide, an analyst at researcher IDC. “Marketers would love to have another viable option beyond Google and Facebook for their advertising.”