Why Amazon Investors Should Keep an Eye on Its Ad Segment

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Investors looking for Amazon's next big profit center should pay close attention to the advertising business. 

Amazon's (AMZN) - Get Report "Other" segment, which includes primarily advertising revenue, grew 37% in Q2 to $3 billion -- and Amazon's on a mission to spread the word about new options for marketers.

eMarketer estimates that by the end of the year, Amazon could capture 9% of the overall digital ad market, second only to Google GOOGL (37%) and Facebook FB (22%).

And Amazon bulls feel pretty good about this. Why? The margins are very attractive.

PiperJaffray analyst Mike Olson estimated last year that Amazon's ad business has operating margins of 60% to 70%, and that by 2021, it could be bigger contributor to Amazon's bottom line than AWS. 

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