Weekly Brief #61
Amazon is selling its ad architecture... Plus, Microsoft's $80 billion AI investment, Anthropic to be valued at $60 billion, Meta stops fact-checking content, Disney buys 70% stake in Fubo, and more.
Good morning investors 👋,
Welcome back to the 61st Weekly Brief.
Nine days into 2025, and the markets continue… not to move at all. The S&P 500 is up 0.25%, the Nasdaq +0.29%, the Dow Jones -0.06%, and the TSX +0.53% (my portfolio +1.40%). Again, it’s only nine days into the new year, and big tech earnings are right around the corner, so this will change. Analysts are expecting 2025 to be another 20% return for the S&P 500. Also, I thought I’d mention: I’m currently writing two books. They’re both eBooks, so mini-books, and are expected to be released on my shop before the end of the first half of 2025.
Both books will technically be free (as outlined in this post I made a few days ago). Feel free to read this Blossom post of mine, then let me know what you think.
PS: Giveaway complete. I’ve just sent an email to the winner of last week’s $60 Amazon gift card giveaway. (I hold one of these every ten weeks, so stay tuned if you didn’t win.)
Let’s get into it. (10 min read)
In this issue:
🛒 Amazon is selling its ad architecture
📋 Meta stops fact-checking content
🇨🇦 Justin Trudeau resigns (with caveats)
FEATURED STORY
🛒 Amazon is selling its ad architecture
Amazon is one of the largest ad companies in the world—the third largest. In less than five years, Amazon built a $0 business into a $50 billion-per-year business called Amazon Ads. Now, Amazon is looking to rinse and repeat the strategy they used for this growth, but for other retailers.
Meet, Amazon Retail Ad Service
The big idea here is called Amazon Retail Ad Service, allowing advertisers to use Amazon’s advertising architecture and tech to advertise on their e-commerce stores, which broadens Amazon’s advertising business away from just Amazon. And here’s what this means:
Amazon ads currently make their revenue from sellers who advertise on their store. These are search result ads (boosting your product’s position in the top results of an Amazon query), display ads (pop-up ads you see for products on the homepage), but also ads that track consumer behaviour on Amazon so that you see another ad for a product you’ve been looking at, but on another store.
This new product is giving any retailer access to these features—not the ability to advertise on Amazon’s platform, but to take their advertising tech, like the above, for their own platform. For example, say Walmart uses Amazon Retail Ad Service, buying it for their e-commerce platform. Now, the same advertising processes Amazon uses for its sellers, Walmart could use for its sellers. Identical. All of those search-sponsored ads, display ads, and tracking ads you see on Amazon, would now appear for Walmart and its products, not Amazon.
Amazon will take a cut of the ad revenue the retailers make from this, as well as a fee for the technology itself. From what I currently know about this so far, this service is only applicable to e-commerce sites that offer third-party sellers to sell on their platform, because this advertising architecture is exactly that. Amazon’s starting this service with small and medium-sized retailers, but will most likely open it up, assuming things go well, to the bigger players like eBay, BestBuy, Walmart, and Target if these retailers want to use it. Retailers rely on third parties to build this type of technology for selling ads, with the leader in the space currently being Criteo. Amazon will, from this, directly compete with these third-party businesses using their proprietary technology.
Amazon’s current advertisers on the Amazon platform can then choose to run ads on these other retailers’ platforms and manage all of their campaigns across the multiple sites in one simple place.
I concur with this announcement. This is great for every shareholder of Amazon, as it’s increasing revenue potential, market share, and diminishing competition by flexing its size. That is, until the U.S. Department of Justice decides Amazon is an illegal monopoly (I hope this isn’t accedential forshadowing. We’ll see what happens). These recent announcements from Amazon are a huge support for my argument about Amazon’s top-of-the-line adaptability with environments and maximizing shareholder growth.
As Amazon ventures into this new product line, I’m not concerned in the slightest. I’m happy. Advertising is one of Amazon’s fastest-growing segments, and now we have a potential sign it may accelerate in growth over the next couple of years. When a big tech giant as long-term visioned as Amazon decides to enter a new product or market, I’m not going to bet against it.
The most optimistic ventures of Amazon (in my eyes):
FINANCE
a. 🏢 Microsoft plans $80 billion AI investment
Tuesday, Microsoft released its plans to invest $80 billion in AI data centre infrastructure in fiscal year 2025. Over half of this investment is focused on the U.S. Last year, tech companies spent well over $200 billion on data centres, with Microsoft, Amazon, and Google at the forefront of it all.
In fact, Amazon has already told investors it plans to spend $75 billion on AI and data centres in 2025, and Meta and Alphabet are probably also preparing to ramp up their data centre investments. As the age of data kicks off, big tech companies continue to prioritize investment in massive data centres over basically everything else. The only hurdle so far? Energy.
Related articles:
b. 🤖 Anthropic to be valued at $60 billion
Anthropic, creator of Claude, which I’ll say is the third most-used AI chatbot on earth after ChatGPT and Gemini, is in talks to raise an extra $2 billion in funding. This would value the company at a massive $60 billion, up from just $16 billion in mid-2024. If this funding round were successful, both founders of the company would officially become billionaires.
Since its founding in 2021, Anthropic has raised over $11.3 billion from investors, including Amazon, Google, and even Salesforce. The company was founded and is run by Dario Amodei (CEO) and Daniela Amodei (President), who left OpenAI over an investment from Microsoft. Cool enough though, Anthropic’s largest investor is Amazon.
Related articles:
BUSINESS
c. 📋 Meta stops fact-checking content
Meta is the parent company of Facebook, Instagram, and Threads.
Meta CEO Mark Zuckerberg announced some massive changes to his company’s moderation policies this week, with plans to streamline operations and prioritize free expression, mostly because Donald Trump is expected to push hard on that topic with his presidency. The major change though, is the removal of their fact-checking program, which they plan to replace with a community system similar to Community Notes on Twitter.
The company will also eliminate its specific content policies for immigration and gender, relying instead on automated moderation for severe violations. Meta has also stated its intention to work with the incoming Trump administration on global free speech initiatives. Something pretty random I found funny (maybe it’s intentional, I’m not sure) is that the company also announced they will be relocating their trust and safety team to Texas.
Related articles:
d. 🤝 Disney buys 70% stake in Fubotv
The Walt Disney Company and FuboTV announced an agreement, which is essentially an acquisition, to combine Disney’s Hulu + Live TV with Fubo. Under the deal, Disney will own 70% of Fubo, with Fubo’s current management leading the newly merged business.
Both of the companies’ services will remain separate from each other. Hulu + Live TV will continue in the Hulu app, and Fubo will maintain its sports services and other features. (Just so we’re on the same page, I also have no idea what Fubo is—probably because it’s American—but it seems like an awesome deal for Disney, so I approve.) Disney is also paying Fubo $220 million, plus a $145 million term loan, as part of this deal. A termination fee of $130 million applies.
POLITICS
e. 🇨🇦 Justin Trudeau resigns (with caveats)
(While I assume everyone already knows by now, and even though I briefly wrote about it already, it’s worth mentioning here because it’s arguably the most important political news this week.) Prime Minister Justin Trudeau is stepping down as leader of the Liberal Party and Canadian Prime Minister after nearly a decade in office, due to astronomical pressure from Canadians and his own party.
Despite this, he’ll remain in office until a replacement is chosen for his party, which is now set to be announced by March 9, 2024. (I received an email from The Globe and Mail as I was writing this section, mentioning this deadline for the Liberal’s leadership race—so this will be fresh info I haven’t wrote about yet when this issue goes live.) Trudeau’s decision to resign comes just weeks after his longtime political ally Chrystia Freeland resigned in December, along with compounding threats from the Conservatives and NDP to vote him out.
Trudeau also asked and received approval from the Governor General for Parliament to be prorogued until March 24, 2024, meaning the government cannot pass new laws or put forward any votes of no confidence until that date. This is all unnecessary political gymnastics to save face for a party dying in the polls, but it’s something that has occurred many times in Canadian election history. For example, Stephen Harper did this back in 2008.
Related articles:
📚 Book of the Week
For every book purchased using the links below, 100% of affiliate commissions are donated to charity. (Amount donated so far: $31.11.)
My full bookshelf: Here.
21 Lessons for the 21st Century - Yuval Noah Harari
Book Description:
21 Lessons For the 21st Century provides a kind of instruction manual for the present day to help readers find their way around the 21st century, to understand it, and to focus on the really important questions of life. Once again, Harari presents this in the distinctive, informal, and entertaining style that already characterized his previous books. The topics Harari examines in this way include major challenges such as international terrorism, fake news, and migration, as well as turning to more personal, individual concerns, such as our time for leisure or how much pressure and stress we can take.
21 Lessons for the 21st Century answers the overarching question: What is happening in the world today, what is the deeper meaning of these events, and how can we individually steer our way through them? The questions include what the rise of Trump signifies, whether or not God is back, and whether nationalism can help solve problems like global warming.
Few writers of non-fiction have captured the imagination of millions of people in quite the astonishing way Yuval Noah Harari has managed, and in such a short space of time. His unique ability to look at where we have come from and where we are going has gained him fans from every corner of the globe. There is an immediacy to this new book which makes it essential reading for anyone interested in the world today and how to navigate its turbulent waters.
Thanks for reading. Feel free to reply to this email or comment on the web if you need anything—I always reply. If you enjoyed today’s issue, feel free to share it with friends and family.
All the best,
Jacob
All my links here.
Short for “Generative artificial intelligence.”
Abbreviation for “Amazon Web Services.” Amazon’s cloud computing business.
Amazon continues to find new business avenues 👌