Amazon (AMZN) is reportedly partnering with Snap Inc. (SNAP) to show shopping advertisements to Snapchat users and link the Amazon marketplace to the social media platform's accounts. Yahoo Finance's Alexandra Canal, Pras Subramanian, and Josh Schafer break down how this potential partnership could leverage the two companies to compete against TikTok shopping.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
ALEXANDRA CANAL: There's a new report out that Amazon is going to be partnering with social media companies, like Meta's Instagram and Snapchat, in order to allow consumers that are on those apps to directly purchase products through the platform. Now, this was interesting to see the stock reaction. We saw Snap shares closing up about 7.5% today, Meta shares closing up roughly 2%, with Amazon closing up about two and a quarter percentage points higher there. But I wonder when it comes to the users, right, I mean, Snap usually has a younger user base, if that's going to translate to people actually going and purchasing Amazon products.
JOSH SCHAFER: No. I mean, this-- Snapchat, we talk about it all the time. They need new sources of revenue, they need new ways to sort of get more out of the users that are on the platform. I totally get the play. I just think you're following something that people already do on TikTok and already do on Instagram. And I don't know if that means people are now going to do it on Snapchat. Like you're now the third social media trying to do this. I think that space is already taken a little bit, in people sort of already like what they're seeing on the other spaces. Tie up with Amazon, though, I mean.
PRAS SUBRAMANIAN: I think it's still-- it can't hurt, right? I mean, for Amazon to be in front of those younger buyers that you want with Snap. And then, you know, looking at a B of A commentary about that, it's talking about how Amazon can sort of, with regards to-- with Meta and Instagram, is leveraging that really superior targeting technology that Meta has. And if you're Amazon, you're like why not? Just get on there, we throw them a couple of bucks for a sort of a rev-share type thing. And then we get more-- Amazon doesn't need-- they have a ton of revenue.
JOSH SCHAFER: For Amazon, it makes sense to partner with anyone in that sense, right?
ALEXANDRA CANAL: Yeah.
JOSH SCHAFER: You're not coming any social media and feed me into Amazon Prime to buy something.
ALEXANDRA CANAL: And Instagram is incredibly targeted with their ads. And I could see-- I mean, I'm hosting a little friendsgiving dinner later this week, and I've been looking up a lot of things on Amazon. And I could see myself being on Instagram, looking through my inspo for recipes and things like that. And maybe they would target me that way.
PRAS SUBRAMANIAN: And I think with Snap, you're like, why do they need Amazon? Well, they need the money, right? So maybe that's part of it. And then potentially, you get better products for your viewers that aren't on Snap. I don't know. Maybe that's-- there's some little bit of a win-win there, potentially.
ALEXANDRA CANAL: Yeah, well, just a report for now. We did reach out to this company for comment, did not hear back. So we'll see if that is confirmed.