Data Makes Them Kings: Facebook Inc (FB), Google Inc (GOOG), Amazon.com, Inc. (AMZN)

Google Inc (NASDAQ:GOOG)’s service is so powerful, in fact, that it essentially took over the web search space. Now you don’t search the web, you “Google” it. That’s a massive statement to the value both customers and advertisers see in the company’s services. While some have complained about Google’s use of data, those complaints haven’t been notable enough to slow this giant’s climb to the top.

It’s also interesting how many competitors have tried to mimic Google Inc (NASDAQ:GOOG)’s advertising success, but have failed to gain any scale. Additionally, it’s notable that some companies, such as Facebook Inc (NASDAQ:FB), have tried to use the valuable data they collect and angered customers to the point that new product efforts are rolled back. Clearly using data isn’t enough, it has to be used in a mutually beneficial way.

A Retailer Gets in on the Act, Too

Amazon.com, Inc. (NASDAQ:AMZN), for example, makes good use out of customer data in a way that customers appreciate. The vast array of products the company’s site sells is a huge draw. However, the lists of recommended items and items that other customers purchased after viewing a certain item are desirable and unobtrusive tools to help customers in their decision making process.

That, however, is only the start. Assuming that Amazon has the right to email a customer, it can push out items that were the focus of recent searches, it can highlight relevant sales, and push items that other customers purchased in addition to a recent purchase. Pushing out to the customer with customer centric information based on customer patterns is a huge tool to spur additional sales.

While not the only reason for the company’s dominance, knowing about customer behavior and using it in a way that benefits both Amazon and its customers is a clear differentiation between the retailer and many of its lesser competitors.

Follow the Data

Investors should keep a keen eye on the collection and use of data because companies that handle these things well tend to benefit disproportionally. It’s also worth watching how new competitors use the data they collect, since data rich companies like Google have changed entire industries overnight.

Yours,

The article Data Makes Them Kings originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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