Amazon's secret weapon: $600 million in annual ad revenue

The company made more than $600 million in ad revenue last year and is expected to generate $835 million this year, according to the latest data from research firm eMarketer.

Amazon's ad revenues.
Amazon's ad revenues. eMarketer

Amazon might be making the bulk of its cash on online sales and tablets, but the company has been quietly building an awfully large advertising business.

According to new data released on Tuesday by research firm eMarketer, Amazon generated $610 million in ad revenue last year, up 45.5 percent compared to 2011. What's more, eMarketer expects Amazon to generate $835 million this year, generating a 37 percent gain over the previous period.

So, how did Amazon do it? The company has been generating revenue from ads in search results on its own pages. The company also generates ad revenue from other sites it owns and through its own ad network.

In May, CNET covered Amazon's burgeoning advertising business, saying that while it was still in its early days, the e-retail giant has designs on becoming a true rival to online ad giants, like Google and Facebook. And Amazon might just have a trump card: shopping data on 209 million consumers -- the kind of data advertisers love.

So far, the vast majority of Amazon's revenue has come through the U.S. In fact, the U.S. accounted for 64 percent of its ad revenue last year. But by 2015, that figure will drop to 25.3 percent, as Amazon expands its ad network internationally. At that time, eMarketer expects the U.S. to contribute $1.1 billion to Amazon's ad revenues.

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