Amazon.com, Inc. (NASDAQ:AMZN) is reportedly squarely in the sights of Google Inc (NASDAQ:GOOG) as the web search and advertising giant is preparing a deeper push into online commerce, a report from Rolfe Winkler on The Wall Street Journal’s News Hub reveals.
According to the publication’s news editor Lee Hawkins, people familiar with the matter say that Google Inc (NASDAQ:GOOG) has approached retailers about creating a buy button for the company’s shopping service. The button, Hawkins said, would be similar to Amazon.com, Inc. (NASDAQ:AMZN)’s one-click ordering feature.
Rolfe Winkler, The Wall Street Journal’s Google Inc (NASDAQ:GOOG) correspondent, said that Amazon.com, Inc. (NASDAQ:AMZN) is effectively eating Google’s lunch. Three years ago, he said, 24% of people searching for merchandize online, they would start with a search engine like Google while 18% started on Amazon.
However, he said that Forrester Research data says 39% of people now start with Amazon.com, Inc. (NASDAQ:AMZN) while just a mere 11% start with Google Inc (NASDAQ:GOOG). He said this is especially important to Google because these searches are the most lucrative for the company.
“What Google wants to do [is] instead of sending you out via links to retailers all the time which can be sort of a hassle, they want to keep you on Google’s page more. They’re doing a lot of things to try and keep you there, giving you more information directly on a Google page,” he said.
Nonetheless, he noted that Google will not start selling and shipping products itself. He did note that people move to Amazon because it’s easy for them to buy what they need. Amazon has the customer’s data in store for easier ordering. It also has a wide selection and better prices, he said.
Google, on the other hand, wants to fight back by not sending people out to retailers’ sites all the time and have a buy now button that would make buying products easier.
“These steps that they’re talking about now with retailers – for instance, a buy button – would say ‘Alright, not only will we give you more information about the product you might want to purchase, we’ll actually let you buy it here without linking you out to another site.’ The idea is we streamline the process, encouraging you to stay here, as opposed to go to Amazon,” Winkler said.
Winkler and Hawkins also discussed Google talking to merchants to promote faster shipping. The service would be similar to ShopRunner, he said, which is like Amazon Prime. For $79 a year, a customer gets unlimited two-day shipping.
Nonetheless, Winkler said that there is a bit of pushback from retailers to Google’s plans as they worry about not getting people on their sites and just competing based on price on Google’s pages.
David Tepper’s Appaloosa Management Lp reported owning 637,067 Google Inc (NASDAQ:GOOG) Class C shares by the end of the third quarter.
William B. Gray’s Orbis Investment Management reported owning 352,828 Amazon.com, Inc. (NASDAQ:AMZN) shares by the end of the same period.
