Which is the Better Mobile Revenue Model, Advertising or E-Commerce?

As Google had built the first big technology company driven by ad revenues, you might argue Amazon is striving to build the first big mobile company driven by e-commerce, even if right now it arguably is focusing not on mobile devices but only tablets.

Part of the challenge, as with any other would-be mobile platform, is creating a sizable appstore and developer community. On that score, some note that the Amazon Appstore earns developers almost as much revenue per active user as they do on Apple’s platform.

The importance of the Appstore success is that it also puts into place the very app ecosystem that would be necessary for any future success of an Amazon smart phone.

For the moment, though, the Kindle Fire is an e-commerce platform for sales of all sorts of Amazon products, ranging from ebooks and music; movies and TV shows and apps. In fact, Amazon aims to convert mobile convert users into buyers in about 30 seconds, as a goal, and boost the percentage of mobile sales from the current eight percent of total transactions that in 2012 were about $61 billion.

In the second quarter of 2013, Amazon booked $15.7 billion in revenue. In the same quarter, Google booked $14.11 billion in revenue.

The conclusion has to be that either can work, though the profit picture is more mixed. Amazon tradtionally has been willing to invest in growing its business, irrespective of quarterly impact on earnings. Google has been less willing to do so.

Mobile advertising might generate about nine billion in mobile ad sales for Google for all of 2013. Amazon might earn about $5 billion in mobile sales in 2013.