The Wall St. Journal and Business Insider reported on Thursday that Google is planning to take on Amazon in the retail sector by offering a new online shipping service with selected retailers. Google is reportedly in discussion with popular retailers such as Macy’s, Office Max, and the Gap to provide one day shipping for their consumers when they make online purchases using Google’s search engine.
When consumers make online purchase on these retailers’ websites after using Google Search, they will receive an offer for one day shipping through UPS for a low discounted price.
Google’s new service would be combined with Google Product Service, an online retail comparison site that allows consumers to search for the the lowest online retail price.
Is Google moving towards a subscription based model like Amazon Prime?
Amazon offers a $79.00 per year subscription called Amazon Prime for their subscribers which allows them to have access to free two shipping on all Amazon.com. products. Amazon Prime subscribers also have access to Amazon’s streaming library of movies and T.V. shows.
Amazon utilizes a cloud based web service called Amazon Web Services (AWS) for their Amazon Prime subscribers which helps to foster customer loyalty and spending with Amazon products.
After the recent release of Amazon’s Kindle Fire, a new 7 inch e-reader/media tablet that operates on Amazon Web Service and is expected to sell in the millions, Google may be getting concerned about Amazon’s expanding reach into their retail domain.
Last week it was reported that Amazon may also be developing a new smart phone that could directly compete against Google’s huge fleet of Android smart phones.
It will be interesting to see if Google’s new expansion plans with online retail shipping will gain traction and build momentum in the days ahead. Are Office Max, the Gap, and Macy’s just the first among many others down the road to get started with Google’s new online shipping retail service or will this new business deal just fade away into the sunset?
Gene Munster, an analyst with Piper Jaffray, told Bloomberg West that he does not believe that Google’s new business enterprise with online shipping deals will hurt Amazon.
“It does not answer the fundamental question about what consumers want until there is a universal checkout under one roof with a system that is expandable and has a shopping cart for all retailers” Munster told Bloomberg’s Emily Chang.
Let’s see what Google does with this new online shipping service. Clearly, there is some potential for Google to grow their retail networking connections and use them as a springboard into something even bigger in the future.
Antitrust lawsuit for Google in early 2012?
According to new published articles in the Deal Reporter- Financial Times, Google may dealing with a European antitrust lawsuit in Europe sometime in early 2012. The European Commission launched an antitrust investigation last November. In early 2012 the EC will issue a 400 page list of objections that highlight the allegations related to Google’s abuse of dominance. Google already responded to the initial allegations and is cooperating.
Google Executive Eric Schmidt is expected to meet with EC Commissioner Almunia at the beginning of next week. It is expected that he will discuss Google’s recent acquisition of Motorola.