AI Weekly Malaysia

Seth Godin argues Amazon's ~$1B/week search ad profit functions as a 'tax' on merchants, since ads distort search results rather than increase total demand. He notes merchants buy ads defensively to protect organic rankings they already earned, and cites a study suggesting ecommerce sites with search ads sell fewer items overall than those without.

Why: If you sell on Amazon or any marketplace with paid search placement, factor in that ad spend may be defensive zero-sum protection rather than demand generation — budget for it as a cost of doing business, not as growth investment. Founders building marketplace or search-ranking features should consider how ad insertion degrades discovery quality.