If I say “Google’s main competitor,” what’s the first company that comes to your mind? If your mind went towards the search engine market, you may have said Bing/Microsoft. Or if your mind went towards smartphones, you may have said Apple. If your mind went to overall Web traffic, you may have thought Facebook. And if your mind happened to go towards set-top boxes, you may have said Roku.
I would bet that very few of you first thought of Amazon (unless you were tipped off by the title to this article). That is what Eric Schmidt, former CEO of Google, opined earlier this week.
Yet, the more you think about it, the more it makes sense. In terms of being an all-encompassing, consumer-level one-stop-shop, Amazon is a huge competitor to Google. Similar to how Google offers a wide range of digital products under its brand, Amazon is on top of all sorts of media from music to tablets to movies to ebooks to virtually every consumer product you could think of. And over the past few months, with the unveilings of Amazon’s Fire TV set-top box and Fire Phone smartphone, Amazon has shown it has the energy and entrepreneurial ambition to try to break into seemingly established marketplaces. And while Google is the #1 website in the US, Amazon is #5, with only Facebook, YouTube, and Yahoo in between. To the point, seen from Google’s perspective, the higher the number of people who spend time shopping exclusively on Amazon means the smaller the number of people who will use Google in order to browse for the same products across several online retailers, cutting into Google’s usership and ad revenue.
To take a swing at Amazon’s infamous Prime two-day shipping membership service, Google is launching Google Express, a same-day delivery service. For an annual ($95), monthly ($10), or per-shipment ($4.99) fee, Google is planning to deliver orders, fulfilled by local retailers, within the same day of placing an order.
Same-day shipping sounds better than two-day, and $95/year sounds better than Amazon Prime’s $99/year, do they not? So does Google have Amazon beat?
It’s more complicated than it seems. Amazon is a retailer, and Google is not. Amazon is able to offer millions of products at discounted prices that balance out the mild inconvenience of having to wait for the item to arrive through the mail or parcel service as opposed to buying them locally. Google Express, it seems, will simply deliver items from retailers in your area (who will pay Google commission) that you could otherwise just go pick up yourself at the same price. Nothing that you could get through Google Express would be unavailable to you through a run to the nearby store at any lower of a price. To be sure, Google Express would be a good service for those who don’t have convenient transportation or physically cannot leave the house. But it would always lack the exhaustive catalog of products that folks can acquire through Amazon. This doesn’t even touch the struggle of Google Express reaching rural customers, for whom it would presumably be cost-prohibitive deliver same-day orders, but who can receive packages at the same cost to Amazon as city customers. And add in the fact that Amazon, too, is exploring a grocery delivery service, Amazon Fresh.
So I don’t see Google Express taking away too many of Amazon’s loyal customers. However, paying Google Express a few dollars to pick up my groceries in town and lug them up the stairs themselves every once in a while… I may be able to get behind that.
Whatever comes of Google Express, expect to see more of the rivalry between Google and Amazon continue to play out in the news. It is amazing to watch cutting-edge services and technology, such as self-driving automobiles and drones that can deliver packages, come out of companies that started not too long ago as two college students making a new Web search tool and a guy packaging online orders out of his garage.