Amazon and Google are on a collision course

http://tech.fortune.cnn.com/2013/05/08/godzilla-vs-mothra-the-sequel/

by Brajeshwar • 13 years ago

71 68 13 years ago

tech.fortune.cnn.com

fimoreth• 13 years ago

> "Shopping on Amazon is a superior user experience and it runs the table on the magical retailer formula of selection, price and convenience"

Clearly has never used Amazon Canada.

But in all seriousness, a great article. It's interesting to see how the different web markets overlap so easily.

MrDOS2• 13 years ago

> Clearly has never used Amazon Canada.

Funny, I came here to say something more serious to this extent. The degree of American-centricity in this thread is astonishing (or perhaps I'm just used to Reddit). Outside of the US – to my understanding, anywhere outside of the US, not just Canada – Amazon is next to useless. The product selection is abysmal and shipping options are terrible. Maybe the article has some points with regards to the American marketplace, but on an international level, Amazon has a long way to go.

(Yes, I realize some Amazon.com retailers do ship to Canada. To those who are about to suggest this to me, I ask: have you ever tried it? In most cases, the shipping costs more than the item in question, and depending on how it ships – something I don't seem to have any control over, although maybe that's just a case of me not knowing how to use Amazon – it either ships UPS and I get dinged with insane “duty” fees, or it ships USPS and I don't see the item for a month.)

bambax3• 13 years ago

> to my understanding, anywhere outside of the US, not just Canada – Amazon is next to useless

No it's not. In France they are fantastic. The product selection is very narrow, yes, but everything else is perfect, namely:

- delivery time and accuracy

- customer service

I once bought a kitchen appliance that my kids broke by letting it fall on the floor. I told Amazon that I would like to buy the part that was broken and they said "we'll just send you a complete product as a replacement, free of charge". The new product came in the very next day.

After a life of having to deal with French retailers this feels like landing on Mars, if Mars had rivers of milk and honey.

SatvikBeri2• 13 years ago

Amazon Japan works well and is quite popular there, at least in Tokyo.

illuminate2• 13 years ago

"Clearly has never used Amazon Canada."

I have friends who moved to Canada and feel similar, but buying ~everything~ seems to be more expensive than in the states. What better options are there for you?

cm20123• 13 years ago

We are a top seller of jewelry in Amazon U.S. We were invited to Canada jewelry beta but they keep pushing back the launch date. We would sell at the same price + some extra built in to keep shipping low. Waiting on you, Canada!

peteretep2• 13 years ago

If I can't buy it via Amazon, I probably won't buy it. I trust the reviews, and I trust them to play fair if they've sent the wrong thing, to such a degree that any other avenue feels like a big waste of my time.

mcintyre19942• 13 years ago

I often find myself pulling my phone out to check Amazon for reviews on a product whenever I do end up in a shop. Needless to say I never end up buying the product in the shop after that.

dewitt2• 13 years ago

> If I can't buy it via Amazon, I probably won't buy it.

This was 100% true of me as well for a decade or more. But getting into the Google Shopping Express beta changed everything. Same day delivery (i.e., even faster than Prime), competitive prices, up-to-the-minute order and delivery tracking, and sharply dressed and exceptionally polite and courteous couriers, means that for a large portion of "just use Amazon" products I'm now going with Google instead. See http://google.com/shopping/express/about/.

Selection and availability are of course the caveats of the early Google tests (limited to just San Francisco and parts of the Bay Area for now), and I was skeptical at first, but boy is this a game changer if we can pull it off. I've averaged almost an order a day since we started.

Granted, Amazon's use of OnTrac in San Francisco for Prime is also a factor. I may not renew my Prime membership for the first time since it launched as a result of OnTrac's poor service here.

(Ob. disclosure: I've worked at both companies.)

bitops• 13 years ago

> I may not renew my Prime membership for the first time since it launched as a result of OnTrac's poor service here.

I've resorted to having stuff delivered to a location where I know that OnTrac is less likely to be used. They do such a shoddy job of delivering on time and seem cheerfully incapable of reading delivery instructions.

illuminate2• 13 years ago

I lost complete faith in Google product search when they cut out all the unpaid aggregation and all the decent prices I seem to find for electronics, musical equipment, etc seem to come from generic ecommerce templated vendors who have no physical presence, but no earthly location or contact information to be found.

ajross• 13 years ago

This is broadly true for me too, but there are some notable exceptions which I think are informative.

A big one is Newegg. Most things I'll search for on Amazon first (or sometimes Google if I suspect there might be review content somewhere else). But computer parts are always cleanest on Newegg, and it's not even close. Their selection is better, and their parametrized search is far more comprehensive.

Now, computer parts are a shrinking market, and Amazon isn't hurting because of this. But I think the broader point is that while Amazon does things really well, they don't do everything perfectly. And customers (like me) are fickle, and will happily kick them to the curb if something better comes along.

Basically Amazon, for all their power, are still selling what are essentially commoditized products. And the barrier to entry there is very low for a player that can actually compete on price or quality. Whether Google is such a player is an open question.

potatolicious2• 13 years ago

The other big problem with buying computer parts on Amazon is that they have a massive gray market supply chain problem that Newegg seems to have been able to avoid.

Put more simply, Amazon's warehouses are filled with knockoff RAM chips, memory cards, and other such hard-to-identify components. Amazon isn't doing this deliberately, but your odds of getting bad RAM, HDD, or flash memory is really quite high.

It's been a while since I worked there - when I was there there was a big problem with inventory mixing. Third party merchants selling on Amazon would routinely ship items to Amazon warehouses to take advantage of Amazon's fulfillment process (this is known as Fulfillment By Amazon), and a huge amount of gray market goods were able to get into warehouses this way. Amazon's own supply chain integrity is, by itself, actually pretty good.

For a long time Amazon allowed these third party-sourced items to mix freely with the legitimate items they purchased themselves, and if you ordered the item (regardless of which merchant you ordered from) you'd be drawing from this shared pool. It was frustrating, and I'm not sure if they've fixed it yet.

blhack3• 13 years ago

This is so true.

The last thing I've recently bought at a retailer other than amazon felt like a hassle.

I decided to buy some glasses from "39 dollar glasses".com -- they offered overnight shipping, which is something I've gotten used to thanks to Amazon.

I've been sitting in my office all day waiting for them to get here, and they haven't, so I got on their website and talked to a person via chat. I found out that they ship 2nd air...but only after a 3-5 day order processing time.

To somebody used to shopping on amazon, that seems completely preposterous. That seems especially insane given that I paid almost $20 for the shipping.

Half the stuff I order on amazon I get delivered on the same day.

Going to some other retailer and finding out that my order won't get here until next week has turned from "normal for ordering things online" to "an awful experience".

Obviously amazon doesn't sell glasses, but my point is that unless somebody can offer at least the service level that amazon does, I won't shop with them for anything ever.

GabrielF00• 13 years ago

Glasses are a poor example because they have to be customized for each customer. Did you really think that they had your prescription with your choice of lens coating in stock that they could just ship out to you next day?

cm20123• 13 years ago

As a major Amazon 3P seller of jewelry, thats great to hear. It would be better if Amazon didnt take a 20% cut, of course.

peteretep2• 13 years ago

Given how small their margin allegedly is, it's because they take the 20% that they can afford to be so awesome!

bambax3• 13 years ago

I used to fear Google disappearing from the world, but some time ago I realized there was nothing to fear, because

- I only shop on Amazon

- every general question(1) is answered on Wikipedia

- every programming question(1) is answered on StackOverflow

so a generalist search engine isn't as essential as it was when those category killers didn't exist.

(1): that I can think of

mcintyre19942• 13 years ago

Are companies being so hugely stretched over multiple billion dollar markets a by-product of the web, or is there some precedent? I mean, of course they're all on a collision course because once they get large enough they seem to find their way into every market.

Another example is Facebook, which obviously competes with G+ but also things like Youtube with a pretty serious video player - a more social take on that seems to have caught everybody off guard. They also seem to be positioning themselves for eCommerce too with recent(?) gift voucher presents etc.

Even looking at younger companies like Dropbox and a push into Email, Twitter and Vine.. collision seems inevitable when the rules seem to, at some point, become do everything you can remotely link to your core product.

mjmahone17• 13 years ago

Interesting. Initially, I was thinking "But Amazon could only ever eat into a small-ish percentage of Google's total revenue, because Lowe's and restaurants and such will still want to advertise on Google so long as anyone is using it for search." However, I think there's a clear avenue around that: allow Amazon to index and ship Lowes' products. This would allow stores to stop supporting their massively expensive e-commerce operations (or significantly reduce them), especially if Amazon allowed the store to have significant individual branding when you're viewing a product they list. They could even index movie tickets and restaurants, which would mean you could Amazon your "night out," reserving tickets and dinner online, in one place.

ereckers• 13 years ago

"allow Amazon to index and ship Lowes' products. This would allow stores to stop supporting their massively expensive e-commerce operations (or significantly reduce them)"

Sounds like the "online malls" of yesteryear, maybe even a little AOLish. I can see Amazon continuing to be used as a sales channel, but I think we've already gone through that line of thinking and a place like Lowes still finds big value in running their own store.

jeffasinger3• 13 years ago

Amazon already is showing links and products from competing sites. This isn't that far fetched.

MBCook• 13 years ago

This is what Borders used to do. For some insane reason their online shopping site was run by Amazon, their biggest competitor.

alaskamiller• 13 years ago

Like toysrus.com, then they gave up.

toomuchtodo• 13 years ago

Will Amazon be willing to customize their engine to meet the needs of specific markets? Not everything is "sell item X to person Y, ship to Z".

jeffasinger3• 13 years ago

Yea, in store pickup, and local delivery by a store are two things I doubt Amazon is prepared to handle well.

orangethirty• 13 years ago

One of my biggest fears as a search guy is that Amazon starts dabbing in general search.

taeric2• 13 years ago

Isn't that what this is? http://www.a9.com/

adventured2• 13 years ago

*That's what that was

A9 failed to compete in general search, so Amazon turned it completely inward as a product search engine.

brudgers• 13 years ago

One of my greatest hopes as a search user is that Amazon goes full force into general search - because as a retailer they will see me as a customer rather than a saleable datum.

cm20123• 13 years ago

You can also SEO amazon's search.

rfriedman• 13 years ago

Another overlap in search I've noticed recently is 'People Search'. 9 times out of 10 this leads me straight to LinkedIn. I imagine the overlap in this area will also have a negative effect on Google's market share.

adventured2• 13 years ago

I had to check to make sure that article wasn't written ten years ago.

"E-commerce is clearly the future of retail and there is a growing battle brewing for dominance in this new world"

Where's the 1998 time stamp?

3825• 13 years ago

Perhaps they are talking about a shift[1] in focus in how Google makes money from just presenting ads to actually delivering end-to-end shopping/procurement/vending.

I know it is already possible with cost per lead and cost per action but "fulfilled by Amazon" is definitely a threat for Google if it gets too big.

[1] the same thing as Robert Scoble did when he was talking about Google glasses a few weeks ago

6cxs2hd6• 13 years ago

I understand what you mean, but the recent push to charge sales tax in the US -- and with huge companies like Amazon actually _supporting_ this -- is a signal that ecommerce has matured. It's the future in the sense of being the new normal for the foreseeable future, as opposed to being a new disruption.

jfoutz• 13 years ago

Weird. I thought amazon made more from cloud services than they did through retail. I wouldn't doubt a collision course, but in search? seems unlikely.

johnrob• 13 years ago

5 years ago, someone at google told me this: our biggest weakness is amazon, because we make a lot of money from google searches that end up with an amazon ad getting clicked on. If people take those searches to amazon (where the purchase ends up anyways), google gets cut out of the transaction.

Google is vulnerable in this case because they are acting as a middle man.

riggins• 13 years ago

So this is a bit of a tangent, but I'm a bit of a fan of economist Hyman Minsky (fascinating, accessible writing on economics btw). One of the really interesting things that Minsky repeatedly points out is that advertising isn't technologically necessary.

It's kinda mind-boggling to step back and think that the main service (advertising) that one of the most valuable companies in world charges for is entirely unnecessary (I put it that way because I think google provides a lot of valuable services they don't charge for). Its always fun to noodle a bit about a world without advertising. I'm sure we'd get along just fine. We'd still figure out what food, clothes, cars, household goods to buy.

freehunter• 13 years ago

Of course advertising isn't necessary. People will find what they need. The point of advertising is to create a need, and after that, make sure that this need is fulfilled by a specific brand. People might find the best product on their own. But companies don't want you to find the best product. They want you to find their product.

willismichael• 13 years ago

I don't get the downvotes - I actually found this to be an interesting comment, thinking about what would happen if we had a mechanism for product discovery other than the kinds of advertising that we get today.

mtrimpe• 13 years ago

What I find even more mind-bending is that since premium brands often come from the same production line as cheaper brands, you're actually paying a company a premium to to convince you they're worth the premium for convincing you even more they're worth ... you get my point.

jlgreco• 13 years ago

Obviously the importance of it depends on the product, and some things don't do it at all, but there is the consideration that although two products came from the same line, they were branded according to how well they passed QA.

Sometimes they keep the same overall brand (see: Intel and AMD disabling defective cores) and sometimes nobody even pretends that the product you are buying is not the result of failed QA for another product (bags of broken pretzel bits), but between those you get a fuzzier line. I have heard that consumer batteries do this for example: the weird-brand batteries that come in your remote control from the factory are probably rebranded batteries from a company you have heard of.

bambax3• 13 years ago

I live in a world as free from advertising as I can make it (AdBlock + no tv + no radio), and I do get along fine.

What's interesting is that advertising that doesn't concern you isn't as annoying as advertising for products that you're able to buy. I love The Daily Show, but sometimes, for some reason, it only works with AdBlock disabled.

All ads on The Daily Show are for American products not available here (fast food brands that aren't present in France, cars that don't exist here) and those ads don't bother me much -- they don't clutter my brain the way an ad for something I could buy does.

bduerst• 13 years ago

I turned adblock off the other day to debug some chromium issues, and forgot I had left it off.

Did you know they now have video ads where you have to type the text of the product slogan if you want to skip the ad?

It's a bit annoying.

bgilroy263• 13 years ago

You're right and everything is going to change. On the other hand it isn't technically completely true.

Advertising and sales, are product info and persuasive information.

Product info is relatively straightforward I think. Persuasive information is credible information about the buyer that explains why the product is needed. The reviews on Amazon serve this need. The websites of camping enthusiasts or cooking enthusiasts etc etc serve this need in Google.

They aren't going away, the work is being done by entities other than the manufacturer. They're being outsourced to amazon or the buyers peers, but the work still needs to get done.

danmaz74• 13 years ago

Personally, I use Amazon when I have a clear idea of what I want, but I use Google when I have to make up my mind before that. I don't see Amazon easily fill that need.

ipsin• 13 years ago

A quote from wikipedia: "in May 2012, Google announced that the service (which was also immediately renamed Google Shopping) would shift in late-2012 to a paid model where merchants would have to pay the company in order to list their products on the service."

This pretty much ended my use of Google for shopping queries. I still tried it a few times after that, but the quality of the search results is so sparse and poor that I end up using Yahoo! Shopping (yes, really) before giving up and going to Amazon.

e3pi• 13 years ago

Crane lofting of final pod for completed anonymous intercontinental missle stack:

[] Tor p2p anonymity

[] Bitcoin: wallet blockchain verification and QR codes/smartphone for street trade

[] Prepaid anonymous debit cards

and...

[]:

"...through Google BufferBox, Google has plans to place secure boxes in convenient locations throughout a city to which you can have parcels shipped to for easy pickup. They just launched their first location in San Francisco, with many more likely to come."

Elon can't be happy about this.

bjhoops1• 13 years ago

I might add to this that I very frequently finding myself using Amazon just for the reviews. You can learn a lot about a product by reading reviews, especially the 1 star ones. If a product has no Amazon reviews, I don't really trust it. I can't remember the last time I googled "Product X reviews."

zmmmmm• 13 years ago

Funny to say they are on a collision course at this point. Did they not notice Amazon forking Android? Selling a directly competing tablet? Did they not notice Google setting up Play Books, Movies, etc. all directly in Amazon core business?

These companies aren't on a collision course - they collided a long time ago.

freefrancisco• 13 years ago

Amazon supported the Internet tax. It would be poetic justice if Google provided a free to use tax and shipment calculation to all merchants if/when that becomes law. Then Google would be able to help users find what they want and sort it by final price, including shipping and taxes. That might be the missing piece that gets all merchants giving Google the information it needs to allow users to do that.

jaynos2• 13 years ago

I think Amazon will still be able to compete in this scenario. They can (and will have to) calculate sales tax. Plus, the tax will be based on the state that I reside in, not the state that the merchant resides in, so there won't be any "gaming the system" to find the lowest price.

Amazon and Google are on a collision course

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