Will Google Cut Amazon Down to Size?

Discussion
Mar 01, 2013

Google is coming after Amazon.com, just not with brick and mortar stores as Android chief Andy Rubin told reporters at Mobile World Congress earlier this week.

According to a report in Wired, Google’s search engine technology is the weapon that a wide variety of companies are using in attempts to take market share away from Amazon.

Among the firms competing with Amazon is Inkling, a digital textbook publisher, which divides chapters into "cards" that can be viewed for free for a limited period of time. Each card, which has its own URL, is indexed and appears in Google searches. The search results, in effect, act as a storefront for Inkling.

Matt MacInnis, founder and CEO of Inkling, told Wired consumers search online "looking for knowledge. They’re not looking for books. They never were."

Which of the various Google technologies and/or businesses represent the most significant challenges to Amazon.com? What Amazon technologies provide it with the greatest protection from the Google threat either directly or indirectly?

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13 Comments on "Will Google Cut Amazon Down to Size?"

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Bob Phibbs
BrainTrust

I read 70% of searchers start on Amazon. That’s the big problem for Google.

Ken Lonyai
BrainTrust

This isn’t a winner-take-all scenario—there’s plenty of room for both Amazon and Google at the top, as well as other companies.

Google’s core search capability is its best asset. When enhanced by geolocation and voice search it gets more powerful. While personally not a fan of the revised Google shopping, it aggregates sellers (capable of paying for listings) into one price driven, easy to search page. If they can effectively combine those features with g+ and really identify shoppers, they will have a big arsenal to match Amazon. Still, Amazon has piles of big data on direct purchase and browsing history, so ultimately it comes down to an inside path vs. an outside path to nearly the same goal. Both will win, mom and pops will lose.

Tony Orlando
BrainTrust

Amazon has a million mile head start on Google, and they built the strongest customer loyalty of all the other online companies combined. Google better pack a big lunch, to figure out how to take market share away, and I’m all for competition, so have at it Google.

Ryan Mathews
BrainTrust

Online consumers were never looking for books, just content? Somebody tell the poor boy to put the pipe down before he overdoses. When is the last time you saw anyone display “content” on a coffee table?

If MacInnis is correct, than the “killer app” of the future is some content blender—think Wikipedia on steroids with better fact checking—and everyone is in trouble.

The trouble with discussing who wins a technology horse race is that the field being debated rarely includes the eventual winner.

The only thing protecting either Amazon or Goggle is wetware, not software, i.e., human loyalty. Strip that away and you’re left with two losers.

Dan Frechtling
BrainTrust

Google is a search engine. Amazon is a shopping engine.

Amazon began capturing commerce searches when the quantity of merchants in its marketplace meant shoppers did not need to go to search engines for selection and price.

At first, Google didn’t seem to care (remember the demise of Froogle?). Google began claiming back lost ground when it added paid Product Listings ads last year.

Amazon continues to have advantages in reviews, personalization, shipping (Prime) and one-click convenience. Those capabilities take a long time to build.

Google will continue to be conflicted by its inventory of content, image and non-commerce search results and an ad-based model that ranks paid search higher than organic, even when less relevant to the shopper.

Camille P. Schuster, PhD.
BrainTrust

The challenges are not really from the technology. The challenge comes, as others have said, from the possibility of losing loyal consumers. The technology is always changing. The companies that use technology to provide services that result in loyal customers are the winners.

Doug Garnett
BrainTrust

Google is strategically the most fragmented company I’ve seen. And so few of their efforts succeed. It seems clear that Google glass is this decades Segway. Now this idea.

What Amazon should fear most are the brick and mortar retailers who integrate online with the store. Because that is what consumers want most—the option to use what’s best including the option to buy online and pick up in-store. Lowe’s is doing this nicely. And it’s far more convenient than Amazon.

Janet Dorenkott
Guest
Janet Dorenkott
4 years 3 months ago

First, the Google ebook business is a small percentage of their business right now. At a high level, Google is a search engine who’s revenues come mainly from online advertising through their Adwords program. Amazon is an online retail website selling mainly books. That said, Google is a force to be concerned about for Amazon now that they are entering this space.

Google & Amazon both have revenues in the $50-60 billion range, however, Google is far more profitable with less overhead. While Google experience over $10 billion in profits last year, Amazon lost money. If Google sticks to the on-line books (eliminating inventory needs), they have a good chance of making that a more profitable business area than Amazon because of their low costs. I think whichever company is most successful at capturing the school-aged children will be the ones who are most successful in this space. They should play it just like Apple played it by capturing the school-aged market.

Ed Rosenbaum
BrainTrust

Amazon is the recognized leader. Google is starting the race from behind. What’s the big deal when the consumer might be the winner here? Let them fight it out.

Herb Sorensen
BrainTrust
This has to be seen in the context of all three of the basic components of retail: 1. Bringing the shopper to the point of “buy,” the meeting of the minds of buyer and seller. 2. Delivering the merchandise/service. 3. Exchanging money. Amazon is so far beyond most people in all three areas that it is hard to properly discuss comparisons like this. First of all, Amazon is the world’s premier salesman! Selling is all about the close, the final acceptance of the offer. In order to reach this point, one has to first bring the buyer into orbit of the potential purchase. This is the single area where Google is potentially effective against Amazon. See “‘Googling’ the Store.” However, getting buyer and seller into the same orbit is only the beginning of the close, not the final consummation. It is that final closing process that Google, and the rest of the world, is far behind Amazon. I really don’t see much recognition that Amazon nearly “owns” salesmanship, with the rest of the world. Particularly techies are approaching this as a pathetically thin matter of big data, allowing some type of appropriate “offer” to the customer. As far as understanding… Read more »
Matthew Keylock
Guest
Matthew Keylock
4 years 3 months ago

I’m not sure I get this debate that well. The same technology in 2 different people’s hands can deliver very different results.

It is not the tech that will determine who wins.

gordon arnold
Guest

No matter where one searches for the latest business trends and news, there is a story about AMAZON in a battle for market share with another substantial retail business. History has demonstrated that a war of any kind on many fronts is ill advised. AMAZON is showing serious growth in spite of the competition they apply for at every market entrance. I wouldn’t be surprised if they are actually looking at sales results for markets they can effectively exploit instead of throwing darts at a wall full of retailers logos.

This is a serious company with real cash to build with in a buyer’s market. There have been many attempts to determine the best way to build a 21st century retail international “clicks then bricks” business. A close examination of Amazon’s financials’ and investments might bring some light to the future discussions relating to how things might work with the new-fangled retailers.

Shilpa Rao
BrainTrust

When Amazon came into the market it changed the rules of the old retail game. People want to read books and they no longer need to be brought in the store, they can get the same experience online and perhaps cheaper, and then it went further that people want to read books and those need not be physical anymore—and the whole e-book and Kindle era started.

I like the idea here where Inkling is redefining this again; people are not searching for books but knowledge. In this whole era of micro blogging, where the Gen Y and Millennials are gravitated towards snippets of knowledge, this might just work.

However, from a point of view, will this put Amazon out of business? definitely not. Amazon has built a strong base of loyal customers and the value of shopping at Amazon is much more than gratifying intellectual needs. Having built a strong base, it will be easy for Amazon to adapt.

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