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Google in talks to take on Amazon in retail: ‘WSJ’

Reuters

Google chairman Eric Schmidt speaks at the APEC CEO Summit in Honolulu, Hawaii, on Nov. 12.

Photo: AFP

Google Inc is pondering an Internet service to help consumers shop online and take advantage of same-day delivery, hoping to stanch the loss of Web traffic to Amazon.com Inc, the Wall Street Journal (WSJ) reported on Thursday.

The Internet search leader is in talks with major retailers and shippers, including Macy’s, Gap Inc and OfficeMax, to set up the service, the newspaper cited people familiar with the matter as saying.

Google declined to comment and Amazon did not return calls for comment. A Gap spokeswoman declined to comment, while Macy’s and OfficeMax were not available for comment.

Google may be casting a wary eye on the popularity of Amazon.com’s Prime service — which offers free two-day shipping for US$79 a year in the US — fearing it will entice away the Web traffic it depends on from its own sites.

About 40 percent of Google’s revenue comes from retail sources, ChannelAdvisor chief executive Scot Wingo said.

Amazon Prime has been such a big success in recent years that it has begun to threaten this big chunk of Google’s revenue, Wingo said.

“Once a consumer joins Amazon Prime, their searches for products at Google have to decrease precipitously,” Wingo wrote in a blog on Thursday.

He owns Google and Amazon shares.

“As a Prime user, I only look for products on Google and other channels if I can’t find it on Amazon,” Wingo added. “Amazon has created a lock-in and they have the world’s best product search engine. That’s 40 percent of the Internet that Google really can’t afford to lose serious share on.”

Google’s plan under consideration stops short of selling directly to consumers, WSJ cited a person familiar with the matter as saying.

Google will instead work with retailers’ Web sites, combining an existing product-search feature that directs shoppers to those sites, with a new shipping service that it intends to create and oversee, the WSJ reported.

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