Amazon Has a Plan to Become Profitable. It’s Called Advertising

For more than two decades, Jeff Bezos has famously sacrificed profit for growth, persuading Wall Street that Amazon.com Inc. was best served pouring money into the logistical nuts and bolts that have turned his company into the Wal-Mart of the web. More recently, investors have found solace in the company’s profitable cloud services business, which has helped offset losses in e-commerce. Still, for the past five years Amazon’s average profit margins have languished at about 1 percent.

Now along comes a business that could generate consistent and healthy returns: It’s called advertising. Over the past several years, Bezos & Co. have quietly put together the pieces for a marketing platform that lets Amazon make money from the sheer size of its audience.