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The Amazon logo displayed on a smartphone and a PC screen.
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Search for “toothpaste” on Amazon, and the top of the web page will show you a mix of popular brands like Colgate, Crest and Sensodyne. Try a separate search for “deodorant” and you’ll first see products from Secret, Dove and Native.

Look a little closer, though, and you’ll notice that those listings are advertisements with the “sponsored” label affixed to them. Amazon is generating hefty revenue from the top consumer brands because getting valuable placement on the biggest e-commerce site comes with a rising price tag.

“There’s fewer organic search results on the page, so that increasingly means the only way to get on the page is to buy your way on there,” said Jason Goldberg, chief commerce strategy officer at advertising firm Publicis.

For consumers looking for toothpaste on Amazon, getting to unpaid results requires two full swipes up on the mobile app.

An example of a mobile search for “toothpaste” on Amazon shows a sponsored brand ad at the top of results.

Until recently, Amazon put two or three sponsored products at the top of search results. Now, there may be as many as six sponsored products that appear ahead of any organic results, with more promotions elsewhere on the page, said Juozas Kaziukenas, who runs e-commerce research firm Marketplace Pulse.

The number of ads that appear differs depending on the exact search term and other factors such as whether users are shopping on desktop, mobile or in the Amazon app, Amazon says.

While Amazon doesn’t break out advertising revenue, ads account for the majority of the company’s “other” sales. That category was the fastest-growing part of Amazon’s overall business in the second quarter, with revenue soaring 87% from a year earlier to more than $7.9 billion.

In 2018, Amazon leapfrogged Microsoft to become the third-largest ad platform in the U.S., trailing only Google and Facebook. Amazon is capitalizing on its market control, knowing that its website or app is where many consumers begin their online shopping journey.

Kaziukenas said Amazon and founder Jeff Bezos have completely transformed from being anti-advertising. It’s become such a lucrative business that ads “have replaced most of the functionality on the site,” he said.

An Amazon spokesperson said there are no dedicated ad slots within search results, meaning that a user may see one ad, multiple ads or none at all. The company said advertising is an optional service for brands and sellers, but that using it can improve visibility of their products.

“Like all retailers, we design our store to help customers easily find and discover the right brands and products, and sponsored ads is one of the many ways we do this,” the spokesperson said in an email. “In all cases we work back from the most useful customer experience and the relevance of the results surfaced, regardless of how they’re presented to the shopper.”

Big consumer products makers aren’t the only ones taking up the most valuable virtual real estate. Amazon is also populating search results with its own products. For example, a search for “shampoo” pulls up a promotion for a bottle of Amazon brand Solimo before ads for products from Pantene, Nexxus, L’Oreal and others.

Sponsored product ads accounted for roughly 73% of retailers’ ad spend on Amazon in the second quarter, according to digital marketing agency Merkle. Last year, Amazon began replacing product recommendations in listings with product ads.

Amazon has also added new ad formats like video ads and sponsored brands posts, which feature a single brand and several product listings in a banner at the top of the page.

Ad prices going up

For brand owners, the price of doing business on Amazon is surging as the company expands its dominance in online commerce.

The cost per click for Amazon search advertising was $1.27 in August, up from 86 cents a year ago, according to a survey of more than 300 Amazon sellers conducted by Canopy Management, an agency that helps manage businesses on Amazon.

Companies that don’t pay the toll are finding their listings buried in search results. At the same time, sellers are paying more overall to Amazon for things like transaction fees and fulfillment services.

“It’s not uncommon now for brands to be spending 50% or more of their product price on various fees to be selling on Amazon,” Kaziukenas said.

Competition has also intensified as a result of the rise of Amazon aggregators, venture-backed companies that are raising big money from outside investors to acquire independent sellers. Some smaller sellers are concerned they may not be able to compete against deep-pocketed aggregators, which are bringing “massive budgets to be spent on Amazon, also in the form of advertising,” Kaziukenas said.

“They’re going from competing against other, smaller sellers to now competing against massive and well-funded sellers,” he said.

WATCH: Inside the rapid growth of Amazon Logistics and how it’s taking on third-party shipping

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.

Rodin Eckenroth | Filmmagic | Getty Images

Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.

Here’s how the company performed in comparison with LSEG consensus:

  • Earnings per share: $2.50 adjusted vs. $2.35 expected
  • Revenue: $3.28 billion vs. $3.14 billion

Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.

While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.

Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.

For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.

Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.

“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”

Better outcomes are a few quarters away, Aujla said.

CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.

At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.

On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.

Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.

On the earnings call, Goodarzi sounded optimistic about the economy.

“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”

WATCH: H&R Block, Intuit shares fall after report Trump administration is considering a free tax-filing app

H&R Block, Intuit shares fall after report Trump admin considering a free tax-filing app

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Bluesky CEO Jay Graber says X rival is ‘billionaire proof’

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Bluesky CEO Jay Graber says X rival is 'billionaire proof'

Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”

In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.

“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”

Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.

X and Meta didn’t immediately respond to requests for comment.

Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.

Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.

“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”

Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”

Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.

“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”

Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.

In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Jaque Silva | Nurphoto | Getty Images

Alphabet shares slid 6% Thursday, following news that the Department of Justice is calling for Google to divest its Chrome browser to put an end to its search monopoly.

The proposed break-up would, according to the DOJ in its Wednesday filing, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”

This development is the latest in a years-long, bipartisan antitrust case that found in an August ruling that the search giant held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act.

The potential break-up would include preventing Google from entering into exclusionary agreements with competitors like Apple and Samsung, part of a set of remedies that would last 10 years.

CNBC’s Jennifer Elias contributed to this report.

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