Amazon changed its search algorithm in a way that could boost profits and sales of its own products, a new report from The Wall Street Journal has revealed.
Search Algorithm Reportedly Tweaked To Include Profitability
The e-commerce company reportedly made the changes late last year despite opposition by some employees.
People who were part of the project said that Amazon optimized the algorithm that ranks listings so that instead of showing the most relevant and best-selling listings related to a customer's search, it also gives a boost to items that bring more profits to the company.
The report revealed that Amazon made changes to the algorithm so it would prioritize factors associated with profitability. The objective was reportedly to give preference to Amazon-made products and third-party products that rank high in the so-called contribution profit, a measure of products' profitability.
Tweaking the search algorithm makes sense for an e-commerce company to boost profits. In the case of the Amazon, it could favor and likely boost the sales of the company's own products since majority of clicks and purchases made by customers are from the first page of the search results.
Amazon Denies Changing Criteria For Ranking Search Results
An Amazon spokesperson, however, denied that the company changed the criteria for ranking search results to factor in profitability but admitted that long-term profitability is one of the factors the company uses to evaluate new search features.
"When we test any new features, including search features, we look at a number of metrics, including long term profitability, to see how these new features impact the customer experience and our business as any rational store would, but we do not make decisions based on that one metric," the spokesperson told CNBC.
The spokesperson added that the company designs its customer experiences to feature products that they will want regardless if these products are the company's own brands or products sold by its selling partners.
