Amazon.com Inc. share price down, plans to launch an online advertising program to compete with Google’s AdWords

Amazon.com Inc. plans to pose a direct challenge to Google Inc., which currently dominates the online advertising market, by developing its own ads placement software. According to people with knowledge of the matter, Amazon is to replace the ads on its pages via a new in-house placement platform.

One of the analysts, who works at IDC – Karsten Weide commented for the Wall Street Journal: “Amazon could use the data it has about buying behavior to help make these ads much more effective. Marketers would love to have another viable option beyond Google and Facebook for their advertising.”

The in-house advertising platform is initially planned to replace the ads that Google Inc. supplies, putting the company in direct rivalry with Google and Microsoft, which dominate the industry.

According to people familiar with the companys plans, Amazons new advertising system is considered to be similar to Googles AdWords and will enable marketers to easier reach the companys clients.

The vice president of iCrossings media unit Mr. Reid Spice commented in a statement, which was cited by the Wall Street Journal: “Amazon knows a lot about how people are searching on the site and consumer preferences and histories. It can use that to tailor advertising in ways that probably nobody else can.”

Currently, a few types of ads are displayed on the pages of Amazons website, including text-based keyword ads placed there by Google Inc. and other third parties, as well as Amazons own product ads.

Both Amazon.com Inc. and Google Inc. refused to make any comments on the situation.

Amazon.com Inc. fell by 0.40% on Friday to close the trading session at $331.59 per share, marking a one-year change of +14.34%. The company is valued at $143.21 billion. According to CNN Money, the 36 analysts offering 12-month price forecasts for Amazon.com Inc. have a median target of $392.50, with a high estimate of $460.00 and a low estimate of $325.00. The median estimate represents a +18.37% increase from the last price of $331.59.