Google "to take on Amazon" with home delivery service

Search giant set to launch its own rival to Amazon Prime, report claims

Stewart Mitchell
2 Dec 2011

Google is planning to compete with firms such as Amazon in the retail world, according to reports.

The company is planning a service where visitors shop online, pay a fee to Google and can expect next-day delivery, a scheme similar to Amazon's Prime service.

According to the Wall Street Journal, Google is in talks with major shippers and retailers in the US – there's no word on a UK service yet – as the search and advertising giant looks to boost online retail earnings.

The move might appear bizarre at first glance, but according to online retail experts, Google has motives for confronting Amazon.

“It's important to remember that 40% of Google's revenue is from the 'retail' vertical," said Scot Wingo, chief executive of e-commerce company ChannelAdvisor, in a blog.

“For a long time, Google didn't really seem to do much with e-commerce, it had fits and starts with Google Product Search, Froogle and Google Checkout. Then in June 2011, it hired Stephanie Tilinius from eBay and since then there has been a concerted new refocus on the category.”

More importantly, said Wingo, as Amazon signs up users to Prime it locks them into Amazon, which means a large portion of product searches will no longer be conducted via Google, which would lose revenue.

“Once a consumer joins Amazon Prime, their searches for products at Google have to decrease precipitously,” Wingo said. “In fact, as a Prime user, I only look for products on Google and other channels if I can't find it on Amazon.

“In other words, Amazon has created a lock-in and it has the world's best product search engine. That's 40% of the internet that Google really can't afford to lose serious share on.”

Google declined to comment on the report.

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