December 4, 2011

Rumor: Google To Go Head-to-Head With Amazon Prime

Google is reportedly considering expanding its online shopping features to include a new service that would allow users to purchase goods on the Web and receive their orders within a day for a low fee, sources have told the Wall Street Journal.

The Mountain View, California-based company is said to be discussing the potential service with "major retailers and shippers" about the service, which could position them to "challenge the e-commerce supremacy of Inc. by diving deeper into the fast-growing world of Internet retailing," Journal reporters Amir Efrati and Stu Woo wrote in a Friday article.

"The effort is a risky one, and would escalate Google's budding rivalry with Amazon, which has been riding the success of its $79-a-year Amazon Prime program," they added. "That program, which offers shoppers fast shipping at no additional charge for many items on the company's website, helped drive a 42% increase in the company's sales in the first nine months of the year."

Efrati and Woo report that Macy's, Gap, and OfficeMax have been approached by Google. The latter two companies refused to comment, but Macy's confirmed that they had been contacted by Google but had not yet decided whether or not to participate in the program.

"Google doesn't plan to sell items directly to consumers," a person familiar with the matter told the Wall Street Journal. "Instead, it will meld its search engine's product-search feature, which directs shoppers to participating retail websites, with a new quick-shipping service that Google will oversee."

The rumored new shipping program would likely be Google's attempt to counter Amazon's Prime program, which, as Eric Mack of CNET points out, provides two-day shipping, free streaming video, and a free monthly check-out of any e-book included in a special collection of titles.

Some, including ZDNet's Gloria Sin, seem to have doubts whether or not the program -- which was reportedly inspired by an increasing number of people bypassing Google's search engine and looking for products directly through Amazon's homepage -- could be successful.

"Amazon has had 17 years (since 1994) to convince shoppers to buy from its site, so it's no wonder many people now turn to Amazon first when looking for product details," Sin wrote on Friday. "Combine that consumer confidence (not to mention web traffic) with the perks of the Amazon Prime membership“¦ [and] Amazon´s seamless offerings are simply tough to beat."

"Of course, Amazon doesn´t carry every single item there is on this planet so there is room for Google to improve shipping and online shopping for the rest of the Internet," she added. "Whether Google is interested in replacing Amazon as the online retail king, or try to take back some of the ad revenues it has lost to Amazon´s website for product-related searches, competition between the two Internet brands will only benefit consumers."


On the Net: