EP354 - Amazon Q3: Ads Slow, AWS Sells Out, and AFS Takes Over

0:01 Welcome to the Jason and Scot Show, your source for the latest news and trends in the e-commerce industry. Featuring hosts Jason Retail Geek Goldberg, Chief Commerce Strategy Officer of Publicis, and Scot Wingo, co-founder and CEO of ReFiBuy. Here are Jason and Scot. Welcome to the Jason and Scot Show. This is episode 354 being recorded on Friday, October 30th, 2026. I'm your host, Jason Retail Geek Goldberg, and as usual, I'm here with your co-host, Scot Wingo. Hey, Jason, and welcome back, Jason and Scot Show listeners.

0:42 We have an action-packed episode for you today. We have so much going on in the worlds that we follow. We've got Instacart and DoorDash merging. We have Amazon Q3. We've got Google Q3. We've got, what's other big news? We've got new MacBooks to talk about. Rest in peace, Patrick Stewart. I was disappointed. Yeah, that was sad. Yeah. Yeah, but we'll get to see him in Doomsday. So that'll be our last goodbye. Indeed, indeed. But most importantly, Jason, you and I love some gadgets. Did you order a new MacBook? No, and I have. You're going to be able to touch the screen, dude. I have some gadget envy because I did not, and I feel like you did, and that does make it hard for me.

1:29 But in the highly unlikely event that my wife is listening to this podcast, I want her to hear that I was being somewhat fiscally irresponsible. And if my laptop just magically looks more shiny, it's because I recently washed it. Yeah, and I don't think you were pulled into the iPhone Duo either. So you've been on really good behavior. I did not Duo, but I did get a new iPhone. which I feel like you did not. So I feel like, yeah. Yeah. Yeah, we're trading. I've been patiently waiting on the computer piece for a while. I think you and I are a very similar sensibilities. And I think I just have a little bit newer laptop than you at the moment. So it would be slightly of a more nominal upgrade for me than it is for you. I think that's the bottom line.

2:15 Yeah, but I can't wait until we're together so I can touch my screen. Oh, yes, that will sting. You're going to go crazy. You're going to get tilted. Yeah, we have some similarities and some differences. I think the differences might be that it will sting me more than it would have stuck. Let's talk about some light reading. Did you pick up the Anthropic S1 and give that a flip? Oh, oh, for sure. I actually had Anthropic read the Anthropic S1 for me. I think most people did. Yes, the vast majority of people did. Yeah, yeah. I feel like the world is so crazy now. Like I'm getting used to some numbers I didn't think I would get used to. Yeah. As an entrepreneur, reading that was the most humbling experience of my life.

2:57 It's like, wow. And then even if I separate my own performance as an entrepreneur, and I think about you and I love to study different businesses and business models. And we've seen in our careers, you know, the rise of you were there in the early days of Blockbuster and all that jazz, which was like one era. Then we had the Googles and then Amazon and Meta. And then now this is It's just like this whole other, just like the speed, the scale, the revenue per employees, like 300 million per employee. Everything you look at, it's just like an incredible business. There are, it's not perfect. There are a lot of things that can go off the rails and, you know, we don't want to have the bubble discussion and all that.

3:40 But if you just like look at it at this moment in time, wow, what a business day book. Yeah, yeah. I have a feeling we're going to look back on this era and realize, what a special time this is. But even living through it, it kind of feels pretty challenging. Yeah, yeah. It's wild times. Yeah. Let's jump into this. Let's do a quick travel update. Have you done any international travel? We were famously together at Retail Club. We recorded two days straight. I think we were both exhausted. Yeah yeah that was a long but fun gig yeah listeners and the audience has been asking for more content and we have been putting it out i've got a lot of favorable comments from folks we're glad you guys are enjoying all the fresh content coming out, have you done any interesting gigs since then.

4:32 I have i've traveled pretty much every week since then i think i've had one week at home but no, no, like public events, all, all client stuff. But again, pace of change in the world is so fast right now. Like, you know, I, I, one of the lucky parts of my job is I work with some pretty interesting clients that are all trying to figure out the same stuff you and I are trying to figure out. And it's, you know, they all have different perspectives. So it's, it's a fun, fun learning. Yeah. Same on my side. A lot of really interesting, I feel like the theme for me is, and you've written about this. So for like the last two years, everyone's been really into the GEO thing, AEO, GEO and all that jazz. And there's a lot of people that say it's all different and some say it's the same. I'm not even going to get into that.

5:16 And now everyone's kind of like, okay, that really didn't do much. I have an AI visibility slide now. And it moves all around and I feel like I have no control over it. And I'm like just putting out press releases as fast as I can. And that's going to like, so that is stabilized. And maybe the bloom has come off that rose a bit. And now everyone's like, but my products are really jacked up when I look at them in this surface and this surface. Why is that happening? So everyone, a lot of people are kind of coming around to this idea of like, you know, what I call a commerce optimization, which is a layer down. So I've been traveling. I just got back from New York and I was at this thing called the Conference Board where they have, this will sound familiar to you. It reminded me a lot of NRF. They have these different councils.

5:57 They did a combined council around this topic, and I was one of the speakers at that. So that was a lot of fun. It was a very wide range. You get to experience a wide range. I'm usually in one kind of the band of mostly retailers, some brands. But there were kind of like some B2B companies that are feeling it, healthcare companies, insurance companies. And then there were a lot of CPG companies. So it was really interesting to kind of hear that everyone is feeling this. And it was a very interesting week for me because we also had all these earnings. The one we're not going to spend a lot of time on is Reddit. And they're just like cratering because they basically said, look, as things move from search engine to answer engine, we're getting no traffic.

6:38 And they basically said, we get nothing. Every time someone goes into AI mode on Google, we get nothing. That's like a literal quote from the CEO. So it's really interesting because people are really starting to feel it right now. Some of the things we've been talking about in theory. So, yeah, so it's a really interesting time. No, no, no, for sure. And like on that, like that particular example, there's kind of two interesting things. There's a bunch of people that have been talking for a long time about this migration to zero click. And these are all people that tend not zero click from a commerce standpoint, but from a search standpoint that, you know, that like increasingly Google is stealing all the attention and keeping it all and not sending it out to the open web.

7:19 Most of these people are kind of anti-Google. And like this, this Reddit story is red meat for them because it seems like, you know, the first like demonstrable sort of victim of this. And then the flip side is you, you mentioned all the hype, the annoying hype, I would argue about GEO. Side note, read my seminal article. GEO is, is probably bullshit, but you should do it anyway, is kind of my, my POV on that. But like for a long time, all the answers on GEO were you should lean into Reddit, which is apparently not alone going to work for you. Yeah. Those days may be over. I think Reddit will be just bot traffic of people just trying to slurp off the reviews. Yeah.

8:01 Yeah. So I think they're trying to pivot. They're blocking the bots and going to log in only. And it'll all be interesting to see how that all plays out. I have great empathy for these businesses that are getting disrupted. Yeah. And then I think it sets the table for ads. And we just came out with a podcast featuring a friend of yours and mine, Kiri Masters. And she is our presenting host of that new channel that we have. So it's called Ad, A-D, Gentic, G-E-N-T-I-C. Check that out if you want to. It's kind of, Kiri loves to do the shorter form kind of things. Because she's smarter than you and I? Well, I don't know what's going on. I think maybe it's a generational thing or maybe it's a Jason problem.

8:47 And it's hard. So these are more snack size. If you like your 15 minute pods, Kiri is your gal. Otherwise you get, you're stuck with, I think we're going to do four hours on this one, Jason. You're stuck with- I was going to ask you what you think the over-under is for this episode. Yeah. I'm thrilled that Kiri's in the network. I feel like you are my agentic maximalist, in my network and Kiri is my advertising maximalist. So it's kind of fun because I'm pretty convinced that you're both a little too extreme. So it's fun. That's what makes it interesting is extreme, extreme perspectives help you think about it. At the risk of making this this episode even longer, I had a fun moment this week on LinkedIn because I I successfully I feel like I picked a fight with with you and our friend Andrew Lipson.

9:39 And I I successfully painted both of you as loony extremists and me as the pragmatic, reasonable person in the middle, which is not anyone else's perspective, but it's fun. Yeah, you left a total trap for yourself, though, because you were talking about your prediction skills. And I was like, oh, boy. I was already ready. I was ready. I have data on this one, buddy. I have more. And mine agrees with yours. But yeah. Yeah. Okay. So one thing I have been dying to hear is your perspective on what is going on with DoorDash. So we've got food delivery and grocery delivery, getting married. So DoorDash is acquiring Instacart. What's the Jason take on this?

10:20 Yeah yeah so this is big news in in my world this week the sadly i i think we were so busy we didn't record a prediction show this january is that your recollection as well. I remember we wanted to. Yes, I think we did not. I probably wrote one, but we didn't lay it down. Yeah. And so I don't think either was- You can retcon and say, this was your prediction. Yes, yes. I don't think either was predicted it, but I did go back and I feel like I predicted Instacart getting acquired about six times on the show. You've always been of the stance. I can bear about that you've been of the stance. Yeah, and I've talked a lot about like, they're going to end up being an infrastructure company and that they're kind of the GSI commerce of grocery, right?

11:06 Meaning they helped a bunch of people early on before they brought the capabilities in-house and they had to pivot once the biggest players all got good at e-commerce on their own. And I feel like that's what we're seeing with Instacart. There is a narrative that Instacart was shrinking and that the acquisition was a shotgun winning. Actually, that's not true. Like Instacart is actually growing. The challenge is... Like the business is transforming, right? Like that, you know, they started out being able to serve these biggest, biggest retailers in the industry. They've all brought it in-house and Instacart had already started pivoting largely to ads and infrastructure to support them.

11:52 And I think what's happening now is DoorDash buying them is really, to me, it's an infrastructure play. DoorDash is their future, not in helping deliver other people's stuff. They see the future as delivering their stuff out of their fulfillment centers right these these dash marks and they've been, totally clear about that that they think from an efficiency standpoint all these orders the the speed of service is going up we have to deliver stuff faster it has to be more efficient a store designed for browsing and discovery is not a good place to pick a grocery order and so their belief is these are all going to get fulfilled out of dart stores this, model has kind of proven out at Amazon, you know, that have all those sub same day delivery stations that look a lot like Dashmarts.

12:40 And so to me, this is about DoorDash buying the infrastructure to execute their Dashmart vision. Is what this comes down to. And it's probably a smart play. Grocery is super bifurcated right now. All the traditional grocers are not doing well. They're all flat or negative. And three people are winning grocery, Amazon, Walmart, and Costco. And so, and Costco is a little bit of a outlier. To me, this is DoorDash trying to become a third alternative to Amazon and Walmart. And we'll see how it all plays out. But why it's super interesting in my world is there are a number of grocers that were dependent, Instacart, for their infrastructure.

13:24 They're not just delivery, but that run their website and manage all of their digital marketing. And in essence, your infrastructure just got acquired by a competitor that doesn't want to make you more successful that wants to replace you, right? And so that's a big disruption for a lot of these regional grocers that are that are on it. Costco is very dependent on Instacart. Aldi is very dependent on Instacart. And so that's a it's a big moment when they found out about this this acquisition. And then Costco just add DoorDash to like have a little bit of separation. So Costco is not exclusively on DoorDash.

14:04 They've had DoorDash has been their primary provider. They actually. Yes. I'm sorry. I'm saying that backwards. Instacart's their primary provider. They added DoorDash and Uber Eats, by the way. So they still are slightly diversified. Yeah. All the, it moved like literally a couple of months ago to a hundred percent Instacart. And so superficially you go, ooh, that's not a good moment. The one huge caveat in all these cases is. Aldi mainly sells stuff that only Aldi makes. And so, like, in a way, they're insulated from this. If you're mainly selling CPG, national branded products, like relying on Instacart as your infrastructure is probably not going to be a good place to be.

14:45 Costco and Aldi, while they use a lot of Instacart, they sell a lot of Kirkland and Aldi products. So they're somewhat protected from that. So it's going to be interesting how all that plays out. And of course, as an advertising platform, this has even become, it was already important. It was probably the third most important grocery advertising platform, and now it's going to be even more important. So if you're a CPG trying to get visibility, like there's a way in which, it you instacart used to be double counting right because you were selling to hyvee and to instacart and you know one order went to both right but now you know, this is potentially a third new customer for the cpgs it potentially, is a market expansion and what tends to happen is when this new distribution channel emergence that was in no one's business plan at the beginning of the year it's all incremental right like if they can get a order to fill all those dash marks.

15:43 From this combined entity, that's incremental sales that they didn't forecast last year. Yeah. How much of this, so you think this was largely a reaction to, oh my gosh, we're kind of out here and we're small. We need to bulk up to kind of get into the game. Yeah, and I think they were dependent on a lot of grocers that weren't going to succeed with or without them that were losing huge share of wallet to Amazon and Walmart. And they needed to muscle up to compete. And there's a digital divide opening up in grocery and they desperately want to be on the winning side of that divide, not on the losing side. And so they are partnering up to give themselves the best chance.

16:25 How much, I think it was interesting because almost at the same time, both DoorDash and Instacart came out with agentic commerce offerings. Instacart is really good. It's kind of, it's called Clementine and I don't know if you've played with it or not. It's A+, it's a very good little, you know, on-site type agent. Yeah. It's a little tricky because I feel like they're taking a little bit of naming liberties. There's more than one agentic thing in the ecosystem. technically clementine is the white labeled agent when you, when you use an eight if you're a third party retailer that have them host their site and you want an agent and it it has some nuanced differences between the agent that runs on instacart.com for example but, but yes they call that that clementine sometimes inconsistently.

17:15 So yeah so it's all it's interesting i was assuming you wouldn't want to talk about these because, like one of the, one of the, the big quotable moments was like, someone asked them how, you know, if, if the, the third party agents and the, you know, potential competitive pressure from, from open AI and Anthropic and, and Google was, was one of the impetuses for this merger. And, and Tony essentially said like, agentic commonisters immaterial, we've like in aggregate gotten like 300 orders. Yeah, from music and stuff. Yeah. That makes sense. Yeah, which not shocking to me, but it's another data point.

17:55 I have a feeling this narrative will come up in a few hours. Yeah. A lot of people use that and they're kind of like, boom, Agenda Commerce is nothing. Spike the ball. But again, it comes back to the definitional thing. I think if Agenda Commerce erodes Discovery and owns that layer, that's pretty disruptive. Yeah. And of course it, it, it spoils the tension, but you and I, I think mostly agree. Like most of these arguments are about like how strict your definition is. Right. And he was very specifically, I think, responding to a muse question. Right. So it was like, is the meta agent coming and, and shopping? And, you know, he was like, that, that has not been very big.

18:37 Like, I, and again, I, I think you and I both see the potential in those agents in the long run. I would not look at their small size now and conclude that they're always going to be small i think there's lots of paths for them to be very meaningful but like i i'm well aware that they're, they're minuscule at the moment and i would argue like not even good enough to be a minimum viable product yet, some yeah the. You're more tolerant than i am i'm not really sure that they're able to track it because frequently like i just ordered yes also as you you you correctly like would point out like they they, in the in the event that some of this is working well they wouldn't actually know although they're you know they're they're certainly paying traffic monitoring services that claim to identify the bot traffic i think you've had one on on retail jantic, yeah yeah yeah there's like human instinct like and of course just, just human oh human and then like cloud flare certainly cloud flare yeah yeah there's a design of these yeah so they they There's all kinds of these things.

19:39 I tend to tell you, but there's, again, there's so many kind of bots at the moment, and they can do some and not do some. I can tell you the big retailers have been like black hat teams and white hat teams with all these bots scraping each other for a long time before Ageantic and with Nick's success. So it's like not surprising that the way better bot versions are even harder. Cool. Well, let's, anything else on that? Or you want to jump right on into the. No, no, no. I think, I think for those listeners that are at the gym, I think like to avoid anyone like losing consciousness, we should move on. All right. There you go. All right. So we have some exciting.

20:22 Amazon news. Your margin is their opportunity. So setting the stage we had it's interesting i think it was two quarters ago they all announced on the same day there was total chaos this time they spread out which is kind of nice but in doing so when you're saying they you mean meta google amazon, yeah the big companies we kind of track okay well because i track walmart and they're not till november, yeah yeah they're they're off cycle being a retailer, and so first of all we had meta and there's lots of disclosures around muse and wall street is like i've never seen him so excited about things you and i are going to do a wall street call and i'm excited uh to hear what ron's approach is on that because he's pretty muse pilled i call it muse mania they've gotten muse mania over on wall street and they are you know they're doing i sent you one of the bigger reports it was like 56 pages and they did this really complex TAM analysis.

21:20 They're basically like, this thing could be $4 billion in 27. And then in that year, it could be 60 billion years. It's like, whoa, whoa, whoa. I thought I was in a just a Comrades Maxwell. You guys are like, you're past your skis. You're into those. I don't know where you are past the skis. It's crazy. But I thought that was interesting. So there was like a euphoria from that. And I wouldn't be surprised. Actually, on the meta side, they're pretty excited about it too, and that's all they talk about now. I wouldn't be surprised if they rebranded the whole company to Muse, so that'll be interesting to keep an eye on them. Then we had, so on Wednesday night, Google came out and they kind of didn't do great. They missed some expectations.

22:03 So they had, a lot of things are going to be mixed at this point. Their cloud compute just totally ripped. That's GCP, Google Cloud Compute. Remind me, is 100% growth good? That is, yes. Now, they are a smaller base than AWS. You've got Azure, GCP, and then also AWS. AWS is the biggest one by far, but it's slowing. And then the other guys are accelerating. Now, it's a little unfair because Google, Amazon would call a little bit of foul on this because Google is putting in their, they're selling hardware now called TPs, which is their GPU. And, but then Amazon is too. So it's kind of starting to be more apples and apples.

22:43 Poor old Microsoft doesn't have their own GPU to sell, but they're doing just fine. Don't sleep over that. So that part of the business was good, but there was one comment on the Google call that just totally tilted the whole market. And it's really interesting. It didn't come until the Q&A, and I want to read this very exactly so I don't mess anything up. One of our friends, Doug Anmuth, he is a Wall Street analyst, and he said, so when they reported in the prepared remarks, there was this disconnect, and no one on Wall Street could understand it. The disconnect is query growth was growing very quickly. And Sundar is like, we've never seen this much growth in the search volume. But at the same time, revenue from search started decelerating.

23:24 And so you have one line going up. And normally those lines would be. Totally correlated. You know, if not, Google's always been good about, well, search went up, but actually ad revenue went up higher because, you know, there's so many people that want this great quality traffic. But then what happened is search volume went up and revenue went down and it slowed. And that is a very strange thing in the world of Google. So Phil Schindler, who is, you know, one of the business guys there, he answered and said the biggest, the biggest part Part of search discoloration revenue was some headwinds on financial exchange, some courtesy stuff. And then they talked about some things or some puts from a year ago with World Cup and then Europe. There's all this international noise in the number.

24:09 And it kind of felt like a little tap dancing. And then he kind of like, he then said, and the strong growth in AI mode queries, had an impact because of the lower monetization we were seeing in AI mode. So this is the big fear that everyone's had is like if you have two customer experiences and consumers and one of them, traditional Google monetizes at this, you know, it's been tuned for 20, 30 years and it's just humming. And then you offer this other experience that doesn't have as many ads and many people, because it is now an answer engine, would find potentially better and more compelling when they see that one, they go over there too fast.

24:52 I think Google's been good at controlling that. And I think maybe that is flooding over now. And Google is doing that because just since we've had our last podcast, an AI overview, when it says more, it typically now will dump you into AI mode. On core Google, frequently, it will put you into AI mode if you enter a longer search query string because they realize that old Google doesn't give you an answer, AI mode Google does. And then what's really interesting is the agentic shopping stuff that was kind of started in AI mode, it is now over on Core Google as well. So they're merging in a way too, which makes it a little confusing, but there's still kind of two separate interfaces.

25:37 But Core Google, they're sending a lot of traffic over there and it's not monetizing as well, which has really got people freaked out. Yeah. Did you freak out? No, no. You know, I think people in my industry are going to freak out. Right. Because that's already getting wildly misquoted. Right. Like so the most common quote now is like, well, why why did you miss your your guidance? And oh, exclusively because search volume is going up. But monetization is going down because agents are less monetizable. Like that's how it's getting quoted. And for your point, like he. He had, he listed like eight macroeconomic factors as most prevalent and then said this, right? So I think it's on the mix.

26:21 I do think it's a real thing. I don't personally get very worried about it because in the history of every advertising platform, you, you never start with the monetization. Like it's always free and good at first. And then you add the monetization after everybody gets addicted to it. Right. So Google was 10 blue links and, you know, then ads slowly went on to it. Right. And Meta was a free way to, you know, hear from all the friends in your social graph. And now it's it's all paid. LinkedIn used to be organic content. Now it's all paid. So like AI Overview is still at the, like, let's get people addicted to this. It's not as heavily monetized.

27:03 I don't think it's going to be particularly challenging to monetize it. And I actually think in the long run. Google has an enormous advantage in, you know, a billion legacy users that they get to move over to these new things, whereas, you know, new people that invent stuff have to have to go out and recruit all those those users. Right. So so I I absolutely think the this shift in attention from search to to answer engines is a disruption in the market and it will disrupt advertising along with a lot of other things. But I don't endemically look at the new thing and go, oh, it's way less monetizable than the old thing. It's just they haven't executed the monetization to the same level, which I think is smart.

27:50 Yeah, Wall Street's kind of on a wall of worry because there's just a lot of concern over this AI buildout. The numbers are getting staggering. No, and it's- They're looking for any crack in the dam. And this is all like a crack in the dam. They're both ironic. Like, they look at, like, these numbers are so eye-watering and scary. And like, I mean, I, I, I think what did Google say? They're, they're forward looking CapEx was going to be like 250 billion. And then they're always like, yeah, Amazon's at 220. And I think Google's worth of that. Yeah. And way more in subsequent years, the starter year. And so I think understandably investors are nervous, but it was kind of funny because they're like, oh, this is the, the crack in Google. And so we're going to, we're going to panic and short Google.

28:31 But then when we talk about Amazon, we're going to talk about partly why like Amazon stock is getting negatively affected because Google did so well. Yeah, it's very, very counterintuitive. Yeah. So what happened is let's pivot into that. So, oh, one more thing on Google. In the, I wonder if you picked up on this. So someone asked Sudar if they plan on coming out with basically a Muse-like thing. And because if you look at a matrix that who has them, they're basically kind of out alone without one. And yeah. Yeah, he said, I mean, they have a nice one, haven't they? Isn't that good? Yeah, it's terrible. Yeah, it's not good. You can't find it as terrible. Yeah, we'll agree to disagree. They're all terrible, but okay. Okay, that one's the worst. The most terrible list, okay.

29:14 And it's like pedantic. You know how on your iPhone, it'll occasionally ask you, do you really want to allow a copy paste? And you're like, geez, take that to like the eighth level. It asks you questions a thousand times. Do you really want to period it in that sense? Things like that. And so as a friend of Walmart, I also don't like them naming things spark, but that's a. He said, we've, we've done these agents and the enterprise, you did this very long answer into the tail end. And he kind of tailed off on the call. He's got kind of a low voice anyway, which I understand. And he said, and we're going to have a consumer one out by the end of the year. So, so they're going to have something out by the end of the year. And you and I know that you can't, and he specifically said earlier, it will, it will help people. We have, we want to have options.

29:59 We have one that helps people sell and one that helps people shop. And so putting those two comments together, which I think is pretty logical, they're going to come out with their own version of a Muse-like thing. And I've kind of come to the conclusion it needs to be in the next 28 days or so, because if you come out with anything after Thanksgiving and you miss the core of Cyber 5 or Turkey 5, I forget what you call it. Then you're kind of toast. So I suspect we'll have something from Google in the next 30 days, which will be exciting for me at least. Interesting yeah i guess since you hate them all you won't even fear no i mean i, i i see the potential in them i i think like you and some other people are, slightly over exuberant about the current experiences right like i i've been doing this for a long time i i worked from in my first computer store when i was 14 years old and i distinctly remember, a guy walking in and me teaching him about this him this new thing called the computer and how you could store all your files in it and how much better it was than a filing cabinet, right?

31:02 Because you could digitally store all your files. And he looked at me and he said, Jason, here's my filing cabinet today. Like name a topic and watch how fast I can pull out the file. Can you do that faster on your VIC-20 computer? No. Right. And his point was like very, very well stated. Like it's cool that you could do these new things, but like until they do them better than the old way, they're not going to get mass adoption, right? And there are some things that Muse could probably do better today than the old way, but one of them is not shopping. Agree to disagree. All right. Yeah. I'm talking about discovery.

31:46 Okay. So then what happened is Wall Street was like, okay, Google missed because of some AI mode thing. Amazon doesn't have AI mode. But they really surprised Google. Spoiler alert. I would argue that Amazon does, but we'll get to that. We'll get to that. The but but aw we have aws at 34 i bet they're going to totally crush it so what started to happen is in 24 hours the whisper numbers went from the wall street kind of thing since this of 34 36 kind of what amazon guided to to 40 everyone's like oh they're going to absolutely because both, both google and microsoft just blew away their compute number yep and then what happened was a couple of things.

32:35 So first of all, it was the way Wall Street thinks about this is kind of like, did you meet the current guidance or not that you gave last time from the last quarter? So that's a beat, meet or miss. And then what are you doing next month? But this introduces a new third dimension, which is, okay, you told us what you were going to do. We now have this new idea what you're going to do, which is our expectation. The company's expectations, Wall Street expectation. and then what's that even like project it's almost like two more things into the future, so this is this quarter is what you had called they met the guidance they give so they met amazon met their own expectations but they missed wall speed's expectations because it kind of ran rampant thanks to their friends at google this sounds very similar to the budgeting process at publicist by the way but yeah.

33:22 Yep everyone gets like super big and then like it gets cut and then you like a little bit more and then you're somehow landing there yeah and by the way one other fun constraining factor of all this like amazon's like oh and we're gonna spend 220 billion dollars on more capacity and even with that spend we have sold 100 of our future capacity and it's like well how how do you miss your forecast when the warehouse is empty right like yeah it was really yeah, Yeah. Some of it doesn't pencil. We're going to dig into that. And my favorite one, we're going to have a lot of disagreements on this. And then you gave two disclosures that we'll go into that everyone was like, head explode emoji.

34:04 It was like, they already couldn't process what was going on to your point. And then Amazon ads, as they dug into it, this is the real quizzical things. It totally whiffed. And no one really asked any questions about it, but we're going to dig into it. So I thought that was really weird of like all the things. So, and then they dropped a lot of exciting new details about Alexa for shopping, which going forward, we're going to call AFS. Just we say less words and Jason's device doesn't trigger on him, which is already done in the green room. Yeah, we accidentally purchased several products in the green room. Yeah, if you're not aware, a lot of people still don't realize this. Rufus is sadly went to the farm. And now we have AFS is what we're talking about, the on-site agent previously known as Rupus. The long form is Alexa for shopping, but internally at Amazon, everyone calls it AFS in the industry.

34:54 So before we dig into some of that, do you want to take us through the headline numbers? Yeah. So you already covered the financial numbers, right? Or did we want to cover just their... I'll give a headline of them. Yeah. So the business grew 12%. Now, another thing to know is, and this is going to come up a lot, is they moved Prime Day, which is always a total PETA. Because last year, it was in Q3, and they moved it into Q2 this year. So that creates all kinds of comp problems. But just remember that it's moved. So basically said, look, if Prime Day had been in Q3, that was 400 bips. So we would have, instead of growing at 12%, we would have grown at like 16%, 17%.

35:35 So everything's hunky-dory on the top one. That huge negative cash flow, but that's just because they're just buying CapEx as much as possible. There's a lot of noise in the free cash flow numbers and things from that. A lot of that, some of us rented. There's like all kinds of financial accounting mechanisms in there. They borrowed more money than they usually do, didn't they? Yeah. A lot of these companies are because they can kind of, they're chewed into free cash flow and they need more money to go buy things. There was a podcast sidebar. I don't know if you saw this. A16Z has a really good podcast. And it was like two of my favorite folks, Ben Horowitz, who is the Horowitz of Andreessen Horowitz.

36:16 He has a very good book in my world called The Hard Thing About Hard Things. And he asked Jassy some really good questions. I've never heard anyone ask him. They did an hour long, you would like this. It's a very long format, sit down with Jassy that is exceptionally good. And his command of these numbers is like nothing I've ever seen before. It's insane. Yeah. You should check it out. The guy's- Oh yeah, I listened to the whole thing. He is on this, you know, he is on this tier of executive that is just amazing. Yeah, for sure. I would I would argue a lot of the Amazon execs have a great grasp of their business. But like if you think about what a big and wide spanning enterprise all of Amazon is, it's it's all the more impressive at the Andy Jassy level.

36:59 Yeah. And you can say stuff. Yeah. Back when I started AWS at Amazon. Yeah. Yeah. That's always cool. And I I believe fact check me, but I believe that business is going pretty well. It is. And in fact, this is one of the things that really set people back. He was going through the things and he was talking about the business overall. And then he kind of like pauses for a second. And he said, this is very uncharacteristic in Amazon world. He did this last time. I thought it was like a little giddy. He was talking about grocery. Remember I'd called that out. Yeah. This time he said, there's never been a business that has one with $1 trillion of annual revenue. Amazon is on a path to have two of those. Basically, the stores, what they now call, he calls the stores, which is everything but AWS and AWS.

37:42 And then that was pretty crazy. Then he said, speaking of guidance, I want you to understand that AWS going forward is going to grow north of 40%. And remember, they printed like into the 30s when everyone was kind of whisper of 40. So it was kind of like, everyone's like, oh, that stank, Q3 was not as exciting as we thought it was. What's going on? He said, oh, don't worry about it. Not only am I going to guide you to AWS being north of 40% for 27, but it also will be in 28. On the A16Z podcast, he told them, yeah, we're basically sold out of all of 27 and most of 28. We keep a little bit for customers that grow, but we're basically sold out for the next two years.

38:27 It's crazy. Yeah. There was actually an interesting conversation on that podcast about the strategy of how much of your capacity to sell versus keep for yourself, right? Because like a lot of Amazon's businesses. This is a Google problem, too. Google is starving off Gemini to feed other folks, to feed GCP. Yeah, this is the new world we live in. Yeah. Then he said we're installing, he calls them AI accelerators, basically a GPU of some flavor, be it a, what's their name called? I forget what the name of their one is, an NVIDIA or their own flavor about every 14 seconds. And when we install one, customers gobble it up. So pretty crazy. Yeah, yeah. And he likes his better than the NVIDIA one because he said the price per performance is better, right? Like the NVIDIA is the absolute performance king, but the price per performance, he feels like training. Just came to me. Yeah.

39:19 Exactly. Thank you. It has the wrong name. And I always have to think, why? It's got the wrong name. It's not because it sounds like it should be for training inference for training. But yeah, yeah, yeah, that'd be sure we thought that. Yeah. Not too late. Maybe they'll call it Rufus. And then you and I were fresh from grocery. Did you get a chance to look at some of the grocery numbers? Yeah, yeah, yeah. Both the retail and the grocery numbers. And caveat, like what Amazon calls retail is not what you and I might think of as the retail business, right? Because first of all, the P&L is, you know, it's 60% marketplace. So they're talking about, you know, all the merchant fees that they get on the marketplace. They definitely, you know, include online, offline ads, the ads in there.

40:02 You called it everything but AWS. I would actually argue it's small at the moment, but they hope it's a big business someday. Leo would be the third business, right? Yeah. Like the satellite. It's not in stores. But so stores is this complicated thing. And we could talk about the comps on stores, the number of units and all that stuff. But what I always try to do is model the gross merchandise value, right? Which is getting harder and harder to do, way smarter than people than me, you know, like our friends at Citibank and Morgan Stanley each have these really sophisticated models.

40:42 And so I look at a range of all their models of GMV, right? And basically, depending on how, like what model you want to believe, the range of their retail growth was somewhere between 7% at the low end. And this is North American retail sales. And like 12% at the high end. And so that's a pretty healthy number. All of retail is growing at like 3% or 4%, but digital is growing at like 7% or 8%, right? So depending on where Amazon really falls, obviously the overwhelming majority of Amazon sales are digital, so you can kind of compare them against other people's digital numbers.

41:28 Whole Foods isn't very significant in the number. So so you end up with, you know, Amazon is growing somewhere between like at the industry average and well above the industry average in terms of how much stuff they sell. But what's super interesting is the mix is dramatically changing. Right. So they are selling many more items than they used to sell. And those items are less expensive than they used to be. And that is largely because of this huge unlock that we talked about on a previous podcast about everyday essentials and grocery, right? And so, you know, they're selling a lot of lower cost items. They're selling a lot of smaller carts because their speed of delivery is so fast for all these items that instead of people doing a weekly stock up and buying all their groceries together, they just buy everything they need ad hoc and it shows up at their house 30 minutes later.

42:20 So the stock up order is like, to some extent, going away in favor of all these ad hoc orders. And so they're like, I think they said that their everyday essentials grew three times faster than their traditional stuff. Like, you know, their best customers do buy both kinds of stuff. But so they're growing very healthy and they're primarily winning this grocery area, which is a total white space for them. And as we talked about earlier, like only really Amazon, Walmart and Costco are growing at grocery like at the expense of everyone else.

43:00 Right. So this all this Amazon growth right now is coming right out of the Kroger's and Albertsons of the world. And so so that that is pretty interesting. And then, you know, he he talked about, you know, and when you factor ads, which are an important part of the retail model, you know, that it's a very, favorable unit economics, even with these these smaller order order values. Right. So that's the big takeaway on retail. Now, if you compare them to U.S. Census, again, like low end of the GMB, they're kind of tying the digital portion of U.S. Census data.

43:40 Who they're getting crushed by is Walmart, right? So if even the high end of their GMB growth is like 11 or 12 percent, Walmart is like 24 to 26 percent digital growth. Now, it's a much smaller base, right? Like Amazon's digital business is much bigger than Walmart's, but Walmart's is the second biggest in the U.S. And it's growing quite a bit faster. Amazon, Andy threw some like very intentional shade at Walmart. He didn't name Walmart, but he said. I was going to say, he knew you were going to say that, Jason. Yeah. He said our grocery business added twice as many incremental dollars as our next biggest competitor. Right.

44:20 Yeah, which is him saying, because we sell so much more digitally. Our gross dollar volume was twice as big as Walmart's. What's the new Walmart's CEO's name? Well, David Gugina is the president of US, and John Furner is the CEO. Yeah, shots fired. Yeah. We'll see if they're earning. But again, both, I think, are true, right? Right. Like I think like it is true. Walmart is absolutely growing faster and taking digital share away from Amazon. Amazon is, you know, much bigger and is incrementally, you know, growing more dollars. And both feature at the same time. Math is crazy. Yes. So, yes, that's what I keep trying to explain to my 11 year old.

45:02 Don't even get into prime numbers. They're magical. Yeah. But so we've already spent way more time on retail than anyone on the earnings call did. Because to the extent that there was any interest in retail whatsoever, it was the topic of ads, which you already wrote a controversial LinkedIn post about. Yeah, I did that before the call and after the earnings. I was kind of like, what's something missing in here? And then I saw the ad number in it. You and I talk about it so much that I've got this part almost memorized. And I was like, wait a minute, ads grew only, it ended up growing. It was like 6% below consensus. So everyone thought it was going to grow at 18%. They grew at 12%.

45:49 Amazon ads hasn't grown sub 22% since your son was in diapers. I mean, like it has been like growing like a weed. And I was kind of like, what's going on? And then it ended up, they have answered part of that, but it still doesn't, I need to go do some, there's some complicated math to be done here. So on the call, they said, there's kind of three things. Number one, there's some NBA thing that I don't understand 100%. And a lot of people tried to analyze this and they're kind of like, we don't get it because anyway, it's super complicated. And then there was another thing. And then the big one was Prime Day and surely that shifted. But even if you, and then they actually qualified it on the call.

46:31 I think he said it was 800 bibs. And if you actually do the math, there's still a hole. And then it actually means last quarter was bad too. It's just hidden by the movement of Prime. Day and then you're kind of like why did they do that like is that why they did this it makes you yeah your conspiracy theory kind of light up a little bit of like something's, i my spidey sense is something's hiding in here and i think i can figure it out my my perspective is and then they also the third thing they said was oh and there's sem changes we decided to you, know a year ago or something to really and they used to really word i kind of had to unpack this and some of the wall. So what happens is you do the call in public and then you have callbacks where you can ask some qualifying questions.

47:15 Usually have the CFO and kind of say, what did Jassy mean by this? And I suspect they got some clarification on this one because on the call, it was super not clear what was going on here. And then, so what they said was, let me get this right. We decided in Q3 of 25 a year ago, we decided to change our search engine marketing program. We decided it's a better experience for customers to send traffic to our search pages on Amazon. But he didn't say like versus whatever. What he was saying was they cut their Google shopping bill and they don't do much on Google. I think that's what clarified down the road.

47:56 They did do an experiment with cutting their Google ad spend, and then they turned it back on. Here's what I'm pretty sure he's talking about. They're the largest Google ad advertiser. And two years ago, when they bought ads on Google, those ads went to product detail pages. So you did a search on Google. It found a product, and they sent you right to a product detail page on Amazon. A year ago, they said, oh, we're not going to send you to product detail pages anymore. We're going to send you to search result pages. So instead of going to a PDP that has one SKU on it with a buy box, you're going to a search result page that has eight SKUs on it.

48:37 And then you would click on one of those tiles and that would take you to a product detail page. And they're saying they think that's a better customer experience. We could debate about that. There's pros and cons to it. I think it would depend a lot on what the search query was on Google that led to it. It's more monetizable. You can only, you can't, like, nobody wants to. Yes, you can put more ads on that search results page than you can on the product detail page. We're basically arbitraging Google, which may not work well. Because even the Google disclosure, where's all that going? Yeah, yeah. But the cynical portion of me would say, I don't know if it's a better customer experience or not, but that is absolutely not why you did it. Well, maybe this is hidden language for where Google traffic is disappearing on us.

49:21 Well so yeah i don't i you know i don't there's been no discussion of their organic traffic from google because it's happening to reddit if it's happening to everybody everyone i talk to it's happening to and they're freaked out it has to be happening to amazon, on the organic side i just don't know how meaningful the organic side is right like i think again amazon uniquely amazon uniquely is buying 17 billion dollars worth of ads from google right so that that, those ads are not getting reduced because of AI, right? Like the AI, the answer engines and any zero click features on Google, you know, universal card, any of those things, those would like be affecting, the organic side, which I strongly suspect was already pretty immaterial to Amazon.

50:10 When you're buying $17 billion worth of ads, the sponsored search result is always going to show up above organic, and the customer is always going to click on that. So I don't know. I think it's going to come into play in just a minute, but big picture here, Amazon definitely missed their own guidance on ads. They missed Wall Street's guidance on ads. And if you look at it through a certain lens, their ad sales slowed way down. One thing that I think Andy had used very awkward language on is. How Prime Day impacted the change, right? He said like eight and a half basis points, but that could mean two different things.

50:54 You took the very simple definition of it and added eight and a half percent. Most likely, what most people assume it meant is the gap between Q2 and Q3. So while you'd have to add half of it to Q3, you'd have to take half of it out of Q2. And so that makes the mis- That makes the Amazon Prime Day much more prominent in the miss. What's funny is a bunch of the analysts have came out like, you would think, this is simple math to do. Like we know Prime Day was in last year and not this year. You'd think all the guidances would have it right. Amazon never gives you enough to figure anything out. No, and the analysts all have already come out. A denominator, a numerator, both.

51:37 Our models were wrong, right? Like our models adjusting for the shift in Prime Day were wrong. So they knew when they moved Prime Day that this was going to be a big quagmire, and it's ended up being a bigger quagmire, I think, than anyone expected it to be. But so three reasons the ad number is lower. Constant currency is unfavorable. Prime Day got moved, and it made it easy to even misunderstand how to adjust that, and a bunch of people got it wrong. And I do think that they're having more trouble monetizing their ads than they used to have, right? And I think this is the exact same problem as Google.

52:21 They said it would be natural to ask if this is an impact from the outside agent traffic. And Andy, very similar to Tony, who said the outside agents are totally immaterial. Andy also said, no, it's totally immaterial. And in his case, I have to believe him because he blocks all those agents. So, of course, they're not. Yeah, well, then he says, and they all suck. Yeah. And it's like, all right. So, of course, they're not material. But there's one agent they don't block, which is Alexa for shopping, AFS, right? And in the same way that when you have AI mode in Google has way less ads in it than traditional Google search, AFS has way less ads in it than traditional A9 search, right? And so if- A bunch of the stats on their earnings call were about how many more people are using AFS and how popular AFS is becoming.

53:15 And by the way, it's not totally spoken, but Amazon does exactly the same thing as Google. When you type a search query into the search box, Amazon decides that query would have been better off as an AFS prompt and it automatically makes it one. And so some of the time you just get an AFS answer, even if you didn't think you were using AFS, but for sure, people are using AFS on purpose more. And Andy would quickly point out they love it, right? And there's a bunch of benefits to it. And it's, you know, again, a huge growth on a small denominator, like, you know, they're quoting, you know, huge percentage growth and how many people use it. Their bar is kind of low because they're not saying they use it for every query they're saying ever used it usually.

53:57 So they use a bunch of this, you know, kind of loosey-goosey Amazon language, But no matter how you slice it, more people are using AFS, and Amazon has less ads in AFS by a large margin. They are getting eaten by Edge of Commerce. Yeah, so they are. It's just their own. It's the call. Yes, the call is coming from inside your house. And it's outside the house. Yeah, I think it's both. So I don't think the outside has hurt Google or Amazon much yet. I'm not saying it won't in the long run, but I don't think we've seen that material impact. But I think they're inside the house. things moving to AI mode is like, yes, a hundred percent. I think that's, that is the, the big takeaway from this quarter for me is as these, these huge juggernauts move from their old experience to their new experience, either because it's harder to monetize or more likely because they're choosing not to monetize it this early in the adoption cycle.

54:51 Their, their monetization is, is taking a haircut for now, right? Like, Why would they do that if they didn't feel there was, it's an illogical economic decision to make. Why are they doing it? No, why didn't Facebook have ads like in the first year of existence? Or why didn't Google have it? Like you need to get customers addicted to the experience and feeling the value. And then you slowly like slap in the ads. I would argue if Google was born with all the monetized pixels that it has today, no one would have ever used Google. They got everyone addicted to it, and then they slowly pivoted from 100% of the pixels being free to 100% of the pixels being monetized.

55:39 And so did Amazon, right? Like product detail pages and search result pages. They used to be 100% organic, and they're 100% paid pixels now. And so this is another new thing. Like, and, you know, I feel like the drug dealers figured it out. Like the first sample is free, right? So, so AFS is free right now. Once you get addicted to it, it's highly unlikely to be free. Now people could argue is the only reason it's not free because they're trying to get you addicted and they're going to put the exact same ads and the same quantity of ads they always did. And we'll get back to the same equilibrium. Or is there an argument that it will, it's somehow intrinsically harder to monetize the, the AFS answers than it is the A9 answers.

56:23 And so, you know, are there some, some user experience challenges that Google and Amazon have to figure out? Right. And I think smart people could, could quibble about which one of those two scenarios is playing out. Yeah. Here's kind of the hypocrisy that, that people talk to me about and it's kind of two layers. And so take ads out of the equation. Yeah. The hypocrisy is. These agentic commerce things stink and you shouldn't use them. But we've got one in it. It's amazing. And yeah, it has less inventory than it went out. But it's our inventory. And it's amazing. Des mentioned that. And you can change your subscribe and save settings. Amazing. You can do all this other stuff. I do agree it's very good.

57:04 But I don't think it's as far off parity with the other ones as Amazon thinks it is. They think there's like this gulf and they're actually closer. And at the same time they're like okay that's one one thing that doesn't totally jive for me and the other one is they're like we're gonna you know we're gonna block all incoming bots but please open up for ours because we have this sell direct program and we're just going to scrape the crap out of your site and pull your inventory on amazon and there's this form you can kind of find to get out of it we hope you can find it but good luck. Yeah we really like your inventory and we're going to send you free traffic. Yeah, I do. I do think that, I mean, there's, there's a lot to unpack there, but for sure they, they all want to win agents.

57:48 They all want you to use their agent. Right. So Andy, like whether he believes it or not, he's got a very vested interest in saying AFS is awesome. People love it. And they're using it in huge quantities and no one ever wants to use Muse. Right. And, and, you know, not only is he, does he have a, a paid financial, you know, vested interest in saying that, like, I'm sure he hopes that's true in his heart of hearts. Of course he does. Right. And there are things that are better about it. I don't actually even care if it's better or worse today. What I'm more interested in is like, what is the potential for it? Like in the future when it's at scale. Right. And there are things that the Amazon provided agent is likely always going to be better at.

58:31 But there are things it intrinsically has a huge disadvantage. The biggest disadvantage is that the Amazon agent doesn't work for Scot Wingo. It works for Andy Jassy. Yeah. And so it's always going to be optimized for favorable outcomes for Andy Jassy, not for Scot Wingo. And there's a potential that Muse will work for Scot Wingo. It certainly wants Scot Wingo to win more than it wants Amazon to win, right? Yeah. And so we'll see if in the long run, if Muse gets equally crapified because it wants Mark Zuckerberg to win, right? But there's a chance for these third-party agents to have a way higher trust factor because they're optimized for favorable consumer outputs.

59:20 And no one believes that the retailer agents are optimized for the consumer's benefit, right? Like they're optimized for the retailer's benefit. Of course they are. And so that's a big potential advantage. It hasn't all played out because these are all dubious MVPs. None of them could scale even if they wanted. Even if you're right and I'm wrong and Muse is the greatest shopping experience of all times, Meta still doesn't want a bunch of people using it because it's so expensive to use right now that. If it really scaled, they would have to come up with a different financial model because there is no way to pay for it as a take rate, which is what they're saying their economic model is now, right?

1:00:03 There isn't enough margin in the whole system to pay the inference cost on all of this stuff. So we are still... Amazon does it at 15%. Amazon's take rates like 15%. People pay it every day? Yeah, yeah. But so can 15% go to 19% so that Muse can have 4% more? Yeah. Uh, well, I think Muse would be happy with five to 10. But, but yeah, so if they get five to 10, but that's still, that's five to 10 plus Amazon, right? Because spoiler alert, Muse can't deliver anything. You're still, you still need someone that has physical goods in that delivery network. And for the vast majority of goods, like in our market, that's going to be Amazon.

1:00:50 Like you take all these data centers they're building and you just attach a small fulfillment center. Boom. Yeah. GPUs and CPG, right? One facility. Yeah. Same cooling system. It's gonna be amazing. Yeah. Yeah. The, so this is all early days. It all is going to have to flush out. Like it's a huge mistake to look at any of it right now and say, this is as good as it's going to be. And we should all judge the winners and losers based on what it looks like right now. Like, as I keep saying, we, the first, this baseball game has not even started. We are still in batting practice and it's super interesting. It's going to be a really exciting game. I'm grateful that we're all here for it, but it is early days.

1:01:31 And so I would be super careful about like drawing any long-term conclusions from who the winners and losers are, right? If you want to look at the market today, vertical agents are the winners. The retail agents are getting more adoption and they're solving more real world problems and they're more viable and more practical to say that that's what the future is going to be, I think would be a huge, huge. What I'm saying is a year ago, I started thinking, how would we know if this was starting to tip over? And I thought, all right, it's going to happen in discovery first. And it was going to start at the research phase and then it'll get into finding it by. It's going to be this natural progression. And just kind of like mobile did and all these things is kind of how it started.

1:02:13 And then I thought, well, you'll start to fill it in the ads because if views go down, then you're going to start to feel it. And I feel like that's happening in Google. It's happening in Reddit. I think we have to see some more quarters. We didn't finish this part. The Amazon ad business has been growing at 22. It did have a spike up in Q2 because of the prime day comp. But if you take that out, going forward, everyone's cut their growth, including Amazon, to like 17%. So it's basically come down. Here's the math I would think of. All this prime day stuff is super confusing. So here's how to make it all go away. Add Q2 and Q3 together and compare Q2. Yeah, absolutely. Let's compare Q3 last year to this year. And the answer is ads are slowing down.

1:02:57 They were 22, Q2 and Q3 of last year grew 22% from the year before. And they grew 19% this year. And the guidance for Q4, which didn't have frown day in either, is 17%, right? So no matter how you slice it, ads are slowing down. I strongly suspect, that's still, by the way, a robust growing business. And it's growing on a big number now. It's shattering. I'm just saying like, yeah, but it, but I think it's intrinsically slowing down. And I think the re I personally think the reason it's slowing down at both Amazon and Google is because these new surfaces are starting to win consumer adoption and either on purpose or on accident, those new surfaces are not yet monetized to the same degree.

1:03:44 What if it keeps ticking down? I guess you can just keep saying the same thing. Yeah. What would you say? In the long run, by the way, I think this has to advertising has to be an important component. And I hate that this is true. I wish it weren't. But when I look at the monetization models and how all this gets paid for, I don't think that billions of consumers are going to pay a big monthly subscription to have access to an agent working on their behalf. Rich people will. You and i will but like the vast majority of consumers won't i would like it to have a subscribe to get out like a youtube pro kind of a thing i would like i wish amazon had that today i would love to pay amazon a higher prime feed not to see that the ads 100 and we may we may get that some version of that option at some point yeah but.

1:04:35 Like it's it's like pay for use is not for almost nothing. Right. The, and then I don't think it's going to be take rate. Like, I think that could be part of the solution, but like, uh, people care too much about the cost of goods. Like, like there's not just free, like there is a take writer. Amazon already has a 15%. Yeah. But again, so that's fine. Like keep your FBA. If you take, no, well, so yes. So if someone puts Amazon out of business, but if you're going to put Amazon out of business, you better have an alternative distribution strategy that you think a hundred billions of dollars sound eye-watering. Try catching up to Amazon's distribution network is going to be an even more eye-watering number, right? So I just don't, I think Amazon is going to keep getting their take rate or, you know, one way or the other.

1:05:26 And so I don't think there's incremental take rate to just add on the top of all this. Like, yes, could someone add more value and take a piece of take rate out of someone else? So you're saying they'll take it out of Amazon, that it's just as likely they'll take it out of Visa. It's just as likely they'll obsolete the old payment methods and say, hey, the 3% that cut the cards are good. All those will play out. And I'm not saying that take rate won't be part of the math. I suspect it will, but I don't think that usage fees alone, subscriptions alone, or take rate alone are going to pay for this. And so I do think ads are inevitably going to be part of the business model going forward, as they have in almost every other broadly adopted consumer technology.

1:06:14 Yeah, if you, unfortunately, we're out of time. Well, if this is interesting to you and you want to see some of the math on this, we're happy to share the analysis we've done. And then, you know, I think both Jason and I'll be posting about this and there'll be a Wall Street call. Sometimes they'll let us invite folks to that. So let us know if you're interested in this topic and we can go even deeper on it. If you can imagine such a thing. I, you know, I'm remit, like I feel like we wrote notes for like a four hour show that thank God we're not going to do. But one thing I did mean to mention is since our last episode, I've taken a bunch of this data that we keep talking about on the show and I've made it all available in real time on my website. So at retailgeek.com, there's now retail, there's a data tab and you can go to that data tab.

1:06:59 All the real-time retailer comps are on there. So right now you can see how Amazon performed against every other retailer on their, their North American comps. You can, many of them, it's not a gap number, but many of them disclose their digital growth. So you can compare Amazon and Walmart's digital growth in real retail time on the website. I did a lot of gaming geeks freak out on LinkedIn over when they find that they're like, Oh my God, this is life changing. Yeah. Yeah. I have one for all the U S department of commerce data. And I have one for, so I have the comps, the U S department of commerce data, and I have the size of the U S all the big U S retailers on an annual basis. So plenty of data for anyone that wants to put their own hypothesis together on any of this.

1:07:44 Awesome. You want to take us home? I will. Hopefully this has been interesting. Lots more to talk about on this one. So I'm sure you haven't heard the last of us on it. But until next time, happy e-commercing. You've been listening to The Jason and Scot Show. For all the latest news and trends on e-commerce and shopper marketing, subscribe to us on iTunes or visit jasonandscot.com. out.